RSC Holdings posted $327 million in total revenue for the first quarter, a 25.3-percent jump compared with $261 million in last year’s first quarter, while rental revenue soared 22.5 percent from $222 million in the year-ago quarter to $272 million in the quarter concluded March 31.
However, the company’s net loss was $50 million, or 49 cents per diluted share, compared with a net loss of $38 million or 37 cents per diluted share for the same period a year ago. The net loss in the recently concluded quarter includes $49 million of pre-tax charges associated with RSC’s refinancing activities in the quarter.
Adjusted EBITDA was $99 million for the quarter, compared with $66 million for the same period a year ago, a 50-percent increase. Adjusted EBITDA margin was 30.2 percent for the quarter, compared with 25.3 percent in 2010. The improved profitability and margins reflects increased volume and improved pricing.
Rental rates improved 2 percent for the quarter compared with the same period a year ago. Average fleet utilization was 64 percent, a 16-percent improvement compared with 55 percent in the year-ago quarter. The company invested $158 million in gross rental capex in response to growing demand. It sold $90 million of fleet at original equipment cost with margins of 27 percent, up from 9 percent in the year-ago quarter. RSC generated 62 percent of its revenue from industrial customers.
“We produced another quarter of exceptional volume growth of 20 percent and generated positive year-over-year pricing of 2 percent, including a 3.8-percent year-over-year improvement in March,” said president and CEO Erik Olsson. “These results drove a 50-percent year-over-year increase in EBITDA and demonstrate the continued and increasing acceptance of our leading value proposition by both industrial and non-residential construction customers. Our strategy of making consistent investments in our footprint, people, technology and sales organization throughout the downturn has positioned us to outpace the growth of our end markets as we enter the expansion phase of the business cycle.”
Business activity in the company’s primary end market, industrial and non-residential construction improved on a year-over-year basis in the first quarter, while the non-residential construction end market, which makes up 35 percent of RSC revenues, declined at a moderating pace, the company said. The company expects these trends to continue and RSC expects double-digit volume growth in the second quarter.
“We see continued strengthening in the industrial markets and are benefiting from increasing customer focus on the total cost of rental and not strictly pricing,” added Olsson. “Customers are embracing the value of our total rental solution approach including our Total Control system. In addition, improved results were widespread with all regions delivering double-digit revenue growth. As a result, we expect continued favorable year-over-year comparisons in the second quarter and remain optimistic that these positive trends will continue throughout the year.”
Based in Scottsdale, Ariz., RSC Equipment Rental is No. 2 on the RER 100.