Following the pattern of other national rental companies, Ahern Rentals posted an 18.6-percent decline in rental revenue for the first quarter ended March 31, a less severe decrease than most of its competitors. Ahern grossed $51.5 million in rental volume, compared with $63.2 million for the same period a year ago.
Total revenue for the quarter was $60.6 million, compared with $70.6 for the first quarter in 2009, a 14.2-percent decline. The operating loss for the quarter was $19.2 million, compared with $4.3 million for the first quarter of 2009.
Early in the quarter, Ahern Rentals added a $95 million term loan facility to its revolver. Financial covenants under the credit facility were changed to only include a net capital expenditure restriction that is fixed at $4.5 million for the first two quarters of 2010, and subsequently determined quarterly based on a performance grid that considers time utilization and dollar utilization and a minimum time utilization of 45 percent.
The percentage of Ahern Rentals’ revenues from its Las Vegas operations was 19 percent, compared with 29 percent for the first quarter of 2009. The company said it does not expect the historically strong operating results it has experienced in Las Vegas will continue at the same or similar levels in 2010 or beyond. To counter this, the company opened 17 new branches in 2009 and six more in 2010, but said it does not plan further expansion in 2010.
“We have been successful in redeploying into new branches all of the equipment that has come off rent from the City Center project during the second quarter of 2009,” the company said in its 10-Q quarterly report filed with the Securities and Exchange Commission.
The company said same-branch revenues dropped 25 percent year over year, but the decrease was offset by about $4.1 million in increased revenues from 19 new branches opened since the end of the first quarter of 2009. The company said average dollar utilization dropped from 31 percent in Q109 to 25 percent in Q110, caused mostly by a 12-percent decrease in rental rates and decrease in average time utilization of its high-reach equipment to 49 percent in the quarter compared with 56 percent for the year-ago period.
EBITDA for the quarter was $5.9 million, at a 9.8-percent margin, compared with $21.2 million, a 30.1-percent margin for the same period in 2009.
Based in Las Vegas, Ahern Rentals is No. 7 on the new RER 100.