Rental revenues increased 27.2 percent for H&E Equipment Services in the third quarter to $77.8 million, compared with $61.2 million for the third quarter of 2011. Total revenues jumped 11 percent to $204.5 million, compared with $184.3 million for last year’s third quarter.
Adjusted EBITDA increased 38.3 percent to $55.9 million compared to $40.4 million last year, yielding a margin of 27.3 percent, compared to 21.9 percent of revenues a year ago.
Gross margin was 32.7 percent, compared to 29.2 percent in the year-ago period. Time utilization increased from 71.8 percent last year to 72.9 percent. Average rental rates hiked 10.2 percent compared to a year ago and improved 2.9 percent compared to the second quarter. Dollar utilization was 36.7 percent compared to 33.7 percent a year ago. Average rental fleet age Sept. 30 was 38.6 months, down from 40.4 months at the end of the second quarter.
“Our rental business remained very strong in the third quarter and we believe this is indicative of a secular shift occurring in the market that will continue into 2013,” said John Engquist, H&E Equipment Services’ president and CEO. “As a result of increasing demand across all our end user markets, we invested more than $60 million in our fleet, which marked the second consecutive quarter of record levels of fleet investment in our company. Our fleet was approximately 18 percent larger at the end of the third quarter than at the end of 2011. Despite our record fleet investment this year, utilization is strong and rental rate gains are robust. The distribution side of our business continues to perform solidly as well, with new equipment sales up 5.3 percent from a year ago. As we move into year end, there is the possibility we could experience increased demand as our customers may look to take advantage of tax incentives before the end of the year.”
Engquist predicted a positive fourth quarter. “All segments of our business are performing well and the industrial segments our business serves remain strong. We are also experiencing solid improvement in our markets that were hit the hardest during the recession. With our significant fleet investment and integrated, full-service strategy, we are well positioned to benefit from improvements in market conditions. Lastly, we are pleased to have completed our successful notes offering which allowed us to pay a $246 million dividend to our shareholders, extend our long-term debt maturity profile until 2022 and enhance our liquidity under the senior credit facility for future investment in our business.”
Baton Rouge, La.-based H&E Equipment Services is No. 11 on the RER 100.