Equipment rentals and related revenues dropped 26 percent in the second quarter for Ahern Rentals, posting $61.7 million this year compared with $83.9 million in the last year’s second quarter. Total revenues for the quarter dropped 27 percent, from $98.1 million last year to $71.5 million in this year’s second quarter.
For the first six months of the year, rental revenue was $124.9 million, compared with $162.4 million for last year’s first half, a 23.8-percent decline. Total revenues plunged 25.8 percent from $191.6 million last year to $142.2 million for the first six months of 2009.
Same-branch revenues decreased 31 percent or $25.6 percent for the second quarter, with the decrease in revenues offset by about $3.4 million in revenue from 13 new branches opened after the second quarter of 2008. Although the number of rental units available increased as a result of capital expenditures that increased the average original cost of Ahern’s rental fleet to $828 million in 2009 from $786 million in 2008, average dollar utilization decreased to 30 percent in 2009 from 43 percent in 2008. The decrease was caused mostly by a 15-percent decrease in average rental rates and a decrease in average time utilization of high-reach equipment to 55 percent in 2009, compared with 70 percent in 2008.
During the second quarter, Ahern Rentals opened branches in Winston-Salem, N.C., and Colorado Springs, Colo. Ahern Rentals now has 58 branches.
Ahern Rentals’ strategies going forward include redeploying unutilized rental fleet to existing branch locations with higher demand and new markets with high-growth potential to improve utilization and continue to diversify the business. Ahern Rentals said it plans to open as many as 17 more new branches by the end of 2010.
The company also plans to significantly reduce capital expenditures. Ahern spent about $151 million on capital expenditures in 2008, and has spent about $23 million during the first half of 2009. The company expects total 2009 capital expenditures to be less than $50 million, mainly for maintenance, fill-in equipment to meet specific customer needs, and to support new branch openings. The average age of its rental fleet is likely to increase, leading to increased repair, maintenance and equipment replacement costs.
Ahern Rentals also plans to continue to expand its customer base into infrastructure-related, alternative energy and other end-user markets distinct from the non-residential construction sector.
Based in Las Vegas, Ahern Rentals is No. 7 on the RER 100.