H&E Equipment Services recently announced operating results for the full-year 2007 and fourth quarter ended Dec. 31, reflecting a full three months of operations for the J.W. Burress acquisition, which was consummated on Sept. 1, 2007.
Revenues for the fourth quarter of 2007 increased 34.4 percent to $289.7 million versus $215.5 million a year ago. Gross profit increased 21.6 percent to $85.2 million from $70.1 million a year ago. EBITDA increased 14.7 percent to $67.3 million compared to $58.7 million a year ago.
Earnings per diluted common share decreased to $0.45 compared to $0.54 on an increased effective income tax rate of 37.6 percent. With a 37.6 percent effective income tax rate in both periods, earnings per diluted common share increased 2.3 percent to $0.45 from $0.44 a year ago.
â€śOur fourth-quarter results reflected solid year-over-year performance as we continued to experience strong new equipment sales due to the demand for cranes, resulting in a 68.3-percent increase,â€ť said John Engquist, H&E Equipment Services' president and CEO. â€śRental revenues were also solid at an 18.5-percent increase, or a 13-percent increase excluding rental revenues from the Burress acquisition. Dollar utilization decreased to 39.1 percent compared to 40.1 percent a year ago. Our dollar returns will continue to be negatively impacted by Burress in the short-term, as they still operate primarily as a distributor with lower dollar utilization than our rent-to-rent operations. Burress' rental returns will increase as we improve its fleet mix, utilization and rates.
â€śExcluding Burress' rental results from the quarter, our dollar utilization increased over the prior year to 40.9 percent. Our Gulf Coast region, Intermountain region and aerial stores outside of Florida and Southern California continue to deliver strong year-over-year performance. The Florida and Southern California markets remain challenging. Burress also delivered weaker than expected results due to market softness in the Mid-Atlantic and the challenges of transitioning from Hitachi to Link-Belt.â€ť
â€śOur revenues grew $74.2 million, or 34.4 percent, from a year ago,â€ť added Leslie Magee, H&Eâ€™s chief financial officer. â€śBurress' revenues were $32.3 million in the quarter resulting in 19.4-percent top-line growth on an organic basis.Excluding revenue growth attributable to Burress, we continued to see fairly consistent trends with recent quarters. We realized record new equipment sales, and also achieved double-digit revenue growth in rentals and in our product support business. Used equipment sales declined on a year-over-year basis.
â€śGross margin for the quarter was 29.4 percent compared to 32.5 percent a year ago with a significant portion of the margin decline attributable to the continued shift in revenue mix to new equipment sales. Gross margin was also affected by a decline in margins on the sale of used equipment primarily due to lower margins on Burress fleet sales. Rental gross margins declined primarily due to the weakness in Southern California, Florida and Mid-Atlantic markets in addition to increased depreciation costs as a result of de-aging our fleet during the year.â€ť
The company said it expects 2008 revenue in the range of $1.134 billion to $1.161 billion and 2008 EBITDA in the range of $264 million to $279 million. The company also expects 2008 earnings per share in the range of $1.84 to $2.09 per share based on an estimated 36.5 million diluted common shares outstanding and an estimated effective income tax rate of approximately 35 percent.
Equipment rental revenues were $78.2 million compared with $66.0 million, reflecting an increase of $12.2 million, or 18.5 percent. At the end of the fourth quarter of 2007, the original acquisition cost of the company's rental fleet was $803.2 million, up $148.0 million from $655.2 million at the end of the fourth quarter of 2006. Fourth-quarter equipment rental revenues included $3.6 million from Burress. Dollar utilization was 39.1 percent, including the fourth-quarter results from Burress, compared to 40.1 percent for the fourth quarter of 2006. Dollar utilization was 40.9 percent excluding the three-month results from Burress.
Parts sales were $28.5 million, representing an $8.0 million, or a 39.0-percent increase compared with $20.5 million. Fourth-quarter parts sales included $5.0 million from Burress. Service revenues were $17.5 million, representing a $3.6 million, or a 25.5-percent increase compared with $13.9 million. Fourth quarter service revenues included $1.8 million from Burress.
The company reported income from operations of $37.3 million compared to $35.1 million in the fourth quarter of last year, reflecting an increase of $2.2 million, or 6.3 percent. Fourth-quarter income from operations included $1.4 million from Burress.
Total 2007 revenues increased $198.7 million to $1.0 billion from $804.4 million in 2006. Total 2007 revenues related to Burress were $42.5 million.
Equipment rental revenues for the full-year of 2007 were $286.6 million compared with $251.4 million, reflecting an increase of $35.2 million, or 14.0 percent. Total 2007 equipment rental revenues included $4.9 million related to Burress. Dollar utilization was 40.3 percent, including the fourth-quarter results from Burress, compared to 41.1 percent.
New equipment sales were $355.2 million compared with $241.3 million, reflecting an increase of $113.9 million, or 47.2 percent. New equipment sales related to Burress were $16.3 million. Used equipment sales were $148.7 million compared to $133.9 million, reflecting an increase of $14.8 million, or 11.1 percent. Used equipment sales included $11.0 million of Burress revenues.
Parts sales were $102.3 million, representing a $20.2 million, or 24.6-percent, increase compared with $82.1 million. 2007 Burress parts sales were $6.9 million. Service revenues were $64.1 million, representing a $10.4 million, or 19.3 percent, increase compared with $53.7 million. Service revenues related to Burress were $2.6 million.
Baton Rouge, La.-based H&E Equipment Services is No. 9 on the RER 100.