BATON ROUGE, La. — H&E Equipment Services last month completed its previously announced acquisition of all the capital stock of La Mirada, Calif.-based Eagle High Reach Equipment, for about $59.9 million, subject to post-closing adjustments. H&E funded the acquisition from its recently completed initial public offering, in which it raised almost $200 million.
H&E also assumes Eagle debts of about $2 million. Eagle is a privately held construction and industrial equipment rental company serving the Southern California construction and industrial markets from five locations. About 75 percent of Eagle's revenue comes from the rental of aerial work platforms.
“We feel this is a positive development for our company as it is our initial entry into the high-growth Southern California market and will provide us with opportunities for further growth,” said president and CEO John Engquist.
The company also announced a 25.5-percent revenue increase in 2005, with total revenue increasing from $478.2 million in 2004 to $600.2 million in 2005. The Baton Rouge, La.-based company increased rental revenue 19 percent year over year, from $160.3 million in 2004 to $190.8 million in 2005. Dollar utilization increased from 33.9 percent in 2004 to 38.6 percent in 2004.
New equipment sales jumped 33.7 percent from $116.9 million in 2004 to $156.3 million in 2005. Used equipment sales rose 30.8 percent from $85 million in 2004 to $111.1 million in 2005. Parts sales went up 20 percent from $58 million to $70.1 million, while service revenues leaped 23.1 percent, from $33.7 million in 2004 to $41.5 million in 2005.
Total gross profit for 2005 was $181.6 million, a 47.3-percent leap from $123.3 million in 2004. Gross profit margin increased from 25.8 percent in 2004 to 30.3 percent in 2005.
For the fourth quarter, total revenues increased 41 percent to $185.5 million, while EBITDA jumped 66.7 percent to $42.7 million. Income from operations increased 123.6 percent to $25.9 percent, net income increased $13.1 million to $14.7 million, and rental rates increased about 13 percent.
Equipment rental increased 24.3 percent in the fourth quarter, to $54.2 million compared to $43.6 million in the fourth quarter of 2004.
“Looking to 2006, we continue to see strong growth,” said Engquist. “We believe non-residential construction spending, the key driver of our business, is in the early stages of a multi-year expansion. We also anticipate continued growth in construction spending in the regions where we have focused our operations — the Southwest, Southeast, Gulf Coast and intermountain regions of the nation.”
The company is No. 10 on the RER 100 and now has 47 branches throughout the Intermountain, Southwest, Gulf Coast and Southeast regions of the United States.
