Neff Rental reported increases in revenue for the third quarter ended Sept. 30, 2005, although profitability was negatively impacted by increased interest expense.
Neff reported an 11.1 percent year-over-year increase in revenues with total revenue of $72.3 million, compared to $65.1 million for the same period last year. Income from operations for the third quarter increased by 52.7 percent to $14.2 million, up from $9.3 million for the same period last year.
Rental revenues increased 18.9 percent year over year to $61.8 million for the third quarter, while same-store rental revenues increased 19.5 percent. Dollar utilization was 53.2 percent, an increase of 5.8 percentage points.
However, net income dropped from $4.6 million in last year’s third quarter to $1.5 million this year because of higher interest expense attributable to increased borrowings to fund the company’s re-capitalization. The company is paying higher interest rates on borrowings.
On June 3, Neff completed a re-capitalization in which an affiliate of Odyssey Investment Partners LLC acquired control of Neff.
For the nine-month period ended Sept. 30, Neff reported a 14.3-percent increase in revenues to $203.2 million, compared to $177.8 million for the same period last year. Income from operations for the nine months increased 72.9 percent to $27 million, up from $15.6 million a year ago. Rental revenues increased 14.3 percent to $165.9 million, same-store rental revenues increased 19.3 percent and dollar utilization was 50.3 percent, a 6.4 percentage point jump.
However, Q3 net loss was $700,000 compared to net income of $1 million for the same period last year. Income from operations and the net loss for the nine months include a loss incurred during the period on the extinguishments of debt in the amount of $4.8 million. Net loss also reflects higher interest expense.
Neff also reported that Kaufman, Rossin & Co., its independent registered public accounting firm, resigned as of Nov. 22. The company said during the fiscal year and subsequent interim period, there were no disagreements between it and KR&Co on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure. After the June 3 acquisition of Neff, the company created a new audit committee that has been evaluating the possibility of engaging a larger, nationally recognized public accounting firm as the company’s independent accountants. The committee has been interviewing firms and anticipates making its selection shortly.
Based in Miami, Neff Rental is No. 9 on the RER 100. It has 66 branches in 18 states.
