Essex Crane Rental’s rental-related revenue for 2009, including revenue from equipment rentals, repair and maintenance, and transportation services, but excluding used rental equipment sales, was $45.6 million, compared to the pro forma total rental-related revenue of $77.4 million for 2008, the company reported last week. The company said the 41-percent decline was the result of lower equipment rental revenue driven by lower utilization rates on cranes and attachments, which represented 66.4 percent of total revenue, or $34.6 million for the year, compared to $61.8 million for the same period in 2008.
The company posted $52.1 million in total revenue compared with $85.9 million for 2009, a 39.3-percent decline. Rental EBITDA was $19 million for 2009, compared with $36.5 million for 2008, excluding the $23.9 million goodwill impairment charge recorded in the year-ago period.
For the fourth quarter, total rental-related revenue was $8.7 million, compared to pro forma total rental-related revenue of $19.8 million for the 2008 period. Equipment rental income was also impacted by a 15.9-percent decrease in the average monthly crane rental rate to $19,181 compared to $22,805 for the same period in 2008.
“While we are disappointed with Essex’s results for 2009, in light of current economic conditions we were satisfied with our ability to successfully manage costs thereby enabling us to optimize free cash flow,” said Ron Schad, president and CEO of Essex. “The decrease in utilization rates and to a lesser extent average rental rates had a significant negative impact on total revenues. Despite the difficult operating environment, we had positive cash flow from operations of approximately $15.1 million or $0.96 per share on a fully diluted basis in 2009 and had $48.7 million of borrowing capacity under our revolving credit facility at Dec. 31, 2009.”
Although Schad declined to offer earnings guidance, he expressed optimism that there would be improved economic conditions in 2010. “We have begun to experience an increase in crane utilization,” he said. “Specifically, we are encouraged that new order commitments (in both quantity of cranes and total dollar amount of bookings) through the first two months of 2010 have been greater than new order commitments received during the entire quarter ended March 31, 2009. The quantity of new business opportunities that we are quoting and the likelihood that these opportunities will materialize are in part the basis for our optimism that our utilization rates will improve throughout 2010. Based on previous market cycles, we would expect that we will only experience a rebound in average rental rates when an increase in demand pushes utilization to higher levels.”
Essex Crane, based in Buffalo Grove, Ill., is No. 30 on the RER 100.