H&E Equipment Services posted a 26.4-percent rental revenue jump in the second quarter, with $70.5 million compared with $55.8 million in the second quarter of 2011. Total revenue was $209 million, a 13.4-percent revenue increase compared with $184.3 million in the second quarter last year.
Net income jumped to $10.5 million in the quarter, compared to $2.7 million in the year-ago timeframe. EBITDA increased 46.8 percent to $51.7 million from $35.2 million, with a margin of 24.7 percent compared to 19.1 percent of revenue a year ago. Gross margins were 30.7 percent compared to 25.9 percent a year ago. Rental gross margins increased to 47.5 percent compared to 40.7 percent a year ago.
Average rental rates increased 11 percent compared to a year ago and improved 5 percent from the first quarter of this year. Dollar utilization was 35.6 percent compared to 31 percent a year ago.
"Our second-quarter performance was very strong as we continued to experience solid demand in all of our end user markets, particularly in our Gulf Coast markets where energy-related activity remains very healthy,” said John Engquist, H&E Equipment Services’ president and CEO. “A modest recovery in commercial construction activity is also driving higher demand for rentals as the fundamentals for this segment of our business are very strong. We are approaching our prior record levels of time utilization and our strong dollar returns allow us to continue to increase our fleet size, which as of June 30th, has surpassed our prior peak levels. Based on the strong demand and improved rental pricing, we plan to further expand our fleet through the remainder of this year.
"Our second-quarter performance was again solid, and we are especially pleased with our bottom line improvement. While the overall economic environment is hard to predict, the trends in the markets we serve remain positive and the momentum in our business is continuing. We are opening two new locations in Texas to expand our presence and we continue to evaluate expansion opportunities in other markets as well."
At the end of the second quarter of 2012, the original acquisition cost of H&E’s rental fleet was $809.3 million, an increase of $84.4 million from $724.9 million at the end of the second quarter of 2011 and an increase of $72.7 million from $736.6 million at the end of 2011. Dollar utilization was 35.6 percent compared to 31.0 percent for the second quarter of 2011. Dollar returns increased reflecting higher year-over-year average rental rates and improved time utilization.
Based in Baton Rouge, La., H&E Equipment Services is No. 11 on the RER 100.
