GREENWICH, Conn. — Estimated 2005 rental revenue for United Rentals topped $3.2 billion, according to results announced by United last month. Although the company's 2005 earnings, financial highlights, and other data and outlooks released in February are preliminary, subject to change based on completion of the 2004 and 2005 audits or the outcome of the still-in-process SEC inquiry, the company announced record revenue, with full-year 2005 total revenue of $3.56 billion, a 15.2-percent increase from 2004, and an industry-record $2.58 billion in rental revenue.
Revenue for the full year from the general rental segment was $3.11 billion, a 14-percent year-over-year jump from $2.71 billion in 2004, with same-store rental revenues increasing 9.8 percent. The trench safety, pump and power segment, which includes rental of steel trench shields and shoring, pumps, temporary power and climate-control equipment did $180 million in revenue, a 38.5-percent year-over-year increase, up from $130 million in 2004. The traffic control segment had $270 million in revenue, a 5.7-percent increase from 2004.
Fourth-quarter total revenues increased 17.1 percent year over year to $962 million. Dollar utilization for the fourth quarter was 69 percent, an increase of 7.7 percentage points from the fourth quarter of 2004, while dollar utilization for the full year was a record 64.9 percent, a 5.1 percentage point jump from 2004.
United said it expects diluted earnings per share of 48 cents for the fourth quarter of 2005 and $1.81 for the full year, with free cash flow for the year of $133 million after total capital expenditures of $839 million.
The company announced its full-year 2006 outlook for diluted earnings per share of $2.13 to $2.23, and said it expects to generate $4 billion in total revenues in 2006. It expects about $175 million of free cash flow in 2006, after total capital expenditures of about $900 million.
Same-store rental revenues increased 13 percent for the fourth quarter and 11.8 percent for the full year, while rental rates increased 5.2 percent for the fourth quarter and 6 percent for the full year. Contractor supplies sales increased 41.7 percent for the fourth quarter and 44.2 percent for the full year to $324 million.
Fourth-quarter 2005 revenues for general rentals were $843 million, a 16-percent year-over-year increase, up from $721 million in Q405. Rental rates for the fourth quarter increased 5.1 percent, and same-store rental revenues jumped 10.3 percent.
Purchases of rental equipment were $757 million in 2005, compared with $592 million in 2004.
As a precautionary measure, the company announced that it is seeking a short-term amendment from the lenders under its secured credit facility to allow the company until April 28, 2006, if necessary, to report its 2004 and 2005 final results.
“Our strong performance in 2005 reflects continuing success in improving rental rates, expanding our rental fleet, increasing time utilization and driving contractor supplies revenue growth,” said CEO Wayland Hicks. “Dollar utilization of 64.9 percent in 2005 was the highest we have ever achieved. All three segments of our business demonstrated strong revenue growth in 2005. Our total revenue growth of 15 percent outpaced our primary end market, private non-residential construction, which improved 5 percent in 2005 according to Department of Commerce data.”
Hicks added that United plans to invest about $845 million in its rental equipment fleet in 2006. “We opened 37 new branches in 2005, and expect to open another 30 to 35 new branches in 2006.”
The company also announced that Martin Welch is the company's new executive vice president and chief financial officer, effective immediately. Welch has served in an interim capacity since September.
“Immediately upon joining us in 2005, Marty Welch delivered strong financial leadership,” said Hicks. “His talents for establishing robust finance organizations and effective controls continue to be crucial as we work expeditiously to complete our financial statements for 2004 and 2005.”
Welch has spent more than three decades in financial management for public and private companies. Prior to United Rentals, he most recently served as director and business adviser to the private equity firm, York Management Services. Welch joined Kmart Corporation as chief financial officer in 1995 and served in that capacity until 2001. During that time, he was instrumental in restructuring the company's balance sheet and strengthening all aspects of the financial operations, including the successful redeployment of financial resources in support of company goals.
Welch served as chief financial officer for Federal-Mogul Corp. from 1991 until 1995. He held various finance positions at Chrysler Corp. from 1982 to 1991, including chief financial officer for Chrysler Canada.
Based in Greenwich, Conn., United Rentals is No. 1 on the RER 100.