Essex Crane Rental Corp. last week said first-quarter equipment rental revenue rose from $10.8 million in last year’s first quarter to $13.9 million this year, a 29-percent increase. Total revenue rose to $17.2 million for the first quarter of 2008, an 18.5 percent increase from $14.5 million in the first quarter of 2007. Rental EBITDA jumped 43.4 percent from $6.4 million in the year-ago period to $9.2 million this year, while equipment rental revenue backlog rose 28.7 percent to $43.1 million in this year’s first quarter compared with $33.5 million at the end of the fourth quarter of 2007.
Essex’s total revenue includes revenue from rental, equipment repair and maintenance, and equipment transportation services, but does not include used equipment sales. The increase in equipment rental revenue was generated by increases in the utilization rate for Essex’s fleet as well as increases in rental rates charged for Essex’s equipment. A portion of the rate and utilization increases is attributable to Essex’s $21.7-million investment in new heavier lift cranes to replace older cranes with lighter lift capacity. Essex’s new heavier lift cranes generate higher utilization and rental rates than older, lighter predecessors.
For the quarter, time utilization was 71.8 percent, compared with 68.1 percent for the same period a year ago. Average monthly rental revenue rate jumped 27.2 percent to $19,163 for the quarter, compared to $15,068 during last year’s first quarter.
Essex management attributes the strong backlog to strength in infrastructure-related end markets. Management estimates 90 percent of projected 2008 rental revenue has already been booked.
Private equity group Hyde Park Acquisition Corp. entered into an agreement in March to acquire the privately held Essex for about $210 million. “Hyde Park is pursuing the acquisition of Essex on the basis of the long-term benefits associated with Essex’s market-leading position serving growing infrastructure-related end markets, as well as the attractive asset value and long useful lives of Essex’s crane fleet,” said Laurence Levy, chairman and CEO of Hyde Park. “As evidence by these strong first-quarter results, Essex continues to benefit from robust demand conditions prevailing in its end markets, as investments in bridge and road construction, power, water treatment, refineries, alternative energy and similar projects remain strong. In addition to the strong demand conditions, Essex’s management has maintained strict cost control, which has contributed to strong profitability for the quarter.
Levy added that Essex purchased approximately $9 million of new heavy lift equipment, expected to benefit operations and profitability beginning in the second half of 2008 and continuing into 2009 and beyond.
“Based on Essex’s backlog on March 31, the pace of new contract-related activity, the addition of new equipment to the fleet and the strength of its end markets, we remain confident in Essex’s ability to achieve or potentially exceed its 2008 projected financial results.”
Based in Buffalo Grove, Ill., Essex Crane Rental Corp. is No. 32 on the RER 100.