Essex Rental Corp. today announced its consolidated results for the fourth quarter and year ended Dec. 31, 2012. Total gross profit increased 89.6 percent to $6.2 million for the three months ended Dec. 31, from $3.3 million for the three months ended Dec. 31. Equipment rentals segment revenues were $18.0 million for the three months ended Dec. 31, versus $16.6 million for the three months ended Dec. 31, 2011.
Equipment rentals segment revenues include rental, transportation, used rental equipment sales, and repairs and maintenance of rental equipment. The 8.2-percent year-over-year improvement in equipment rentals segment revenues is the result of an increase in utilization for the company’s core rental equipment groups and an increase in the associated transportation revenues. These increases were partially offset by a decrease in used rental equipment sales of $1.8 million. Gross profit for this segment increased by 74.3 percent to $4.7 million for the three months ended Dec. 31, from $2.7 million in the comparable period in 2011.
Adjusted EBITDA before non-cash compensation and non-recurring expenses for the fourth quarter increased 136.5 percent to $5.0 million as compared to $2.1 million for the same period of 2011. Full-year adjusted EBITDA before non-cash compensation and non-recurring expenses increased by 90.1 percent to $17.2 million for 2012 compared to $9.0 million for full-year 2011.
Gross profit margin increased by approximately 12.3 percentage points to 26.9 percent for the fourth quarter from 14.6 percent for the same period of 2011 due to higher margins in the equipment rentals and parts and service segments.
Average monthly crawler crane rental rates increased by $387 to $17,947 for the three-month period ended Dec. 31, 2012 from $17,560 for the three-month period ended Sept. 30, 2012. The average monthly rental rate achieved in the fourth quarter of 2012 was the highest since 2009, the company said.
“In the fourth quarter of 2012, we continued to experience a gradual improvement in our business,” said Ron Schad, president and CEO of Essex. “We have seen increases in activity in most of our end markets on a year-over-year basis, with the largest increases in the power and petrochemical sectors. The expected duration of new crawler crane orders year to date through December has increased by 9.6 percent compared to the prior year’s orders. The increased duration is providing greater revenue visibility and if this trend continues, is likely to have a positive impact on utilization.”
Crawler crane utilization increased to 44.8 percent for the quarter compared to 43.4 percent and 38.3 percent for the three month periods ended Sept. 30, 2012 and Dec. 31, 2011, respectively. Crawler crane utilization increased in every quarter of 2012.
Rough-terrain crane utilization was 61.9 percent for the fourth quarter. While it is down from the historic high of 69.3 percent for the three-month period ended Sept. 30, it has increased when compared to 51.8 percent for year-ago fourth quarter.
“Utilization on our hydraulic heavy lift crawler cranes, which represent approximately 70 percent of the value of our crawler crane fleet and 50 percent of our entire fleet, equaled 63.8 percent for fourth quarter,” said Schad. “These cranes have a higher lifting capacity and typically command a rental rate nearly twice that of traditional crawler cranes. We are selectively increasing rental rates for certain categories of our heavy lift crawler fleet.”
In January 2013, the company sold the remaining aerial work platforms and forklifts from its rental fleet, and completed its exit from this market.
“Thus far in 2013, we are continuing to experience a gradual recovery across all of our business lines as compared to the same period in 2012,” Schad continued. “For example, since the beginning of the year we have increased the number of crawler cranes on rent by approximately 10 percent as measured against units on rent at Dec. 31, 2012. Rental rates continue to be firmer across all of our asset classes and where utilization warrants it, we are raising rates. Assuming a continued gradual improvement in crawler crane utilization and no material improvement in rental rates, we are expecting EBITDA before non-cash compensation expenses for the year ended Dec. 31, 2013 to be in the range of $21 million to $26 million.
Based in Buffalo Grove, Ill., Essex Crane Rental Corp. is No. 29 on the RER 100.
