Rental revenue increased 21 percent for the third quarter of 2014 for H&E Equipment Services compared to the third quarter of 2013, because of a larger fleet, higher fleet, improved physical utilization and improved rental rates, the company said. Rental revenues totalled $108.2 million. Total revenues increased 1.7 percent from $270.4 million a year ago to $275 million this year.
Net income jumped 9.7 percent or $1.3 million to $15.3 million in the third quarter compared to $14 million a year ago. Combined parts and service revenues increased 10.7 percent in the third quarter to $44.6 million this quarter compared to $40.3 million a year ago.
EBITDA climbed 18.8 percent to $83.1 million compared to $70 million in the year-ago frame, yielding a margin of 30.2 percent of revenues compared to 25.9 percent a year ago. Combined parts and service revenues increased 10.7 percent in the third quarter to $44.6 million this quarter compared to $40.3 million a year ago.
Average time utilization (based on original equipment cost) was 74.1 percent compared to 72.3 percent a year ago and 72.7 percent in the second quarter of 2014. Average time utilization (based on units available for rent) was 68.3 percent compared to 66.6 percent last year and 67.0 percent last quarter.
Average rental rates increased 2.9 percent compared to a year ago and improved 1.3 percent compared to the second quarter of this year.
“The solid strength and momentum in our business continued in the third quarter and we believe further substantiates the recovery in the non-residential construction market,” said H&E CEO John Engquist. “In the third quarter, we achieved a healthy 21.0-percent increase in rental revenues, maintained above industry average utilization, and similar to last quarter, our combined parts and service business experienced double-digit growth. Although our new equipment sales were down year over year, we believe that this is primarily due to a challenging comparable quarter last year and demand for new equipment remains strong. We are pleased with the solid leverage in our business as EBITDA increased 18.8 percent on single-digit revenue growth, validating our strategy and evidencing our ability to capitalize on improving trends and opportunities in our end user markets.
“Our outlook for the remainder of this year and into 2015 remains positive as we believe our company will continue to benefit from the anticipated growth in the commercial construction markets in the United States. The significant capital projects forecasted for our Gulf Coast region related to major chemical, energy and manufacturing are reported to be on track. We anticipate further fleet investment during the fourth quarter based on the current demand in our markets as well as in anticipation of these projects. Our company remains focused on executing our strategy and profitable growth.”
At the end of the third quarter of 2014, the original acquisition cost of the company’s rental fleet was $1.2 billion, an increase of $218.1 million from $978.9 million at the end of the third quarter of 2013 and an increase of $196.2 million from $1.0 billion at the end of 2013.
Based in Baton Rouge, La., H&E Equipment Services is No. 8 on the RER 100.
