H&E Equipment Services has topped the $400 million mark in equipment rental revenues for 2014, coming in at $404.1 million, compared with $338.9 million in 2013, a 19.2-percent year-over-year leap. The Baton Rouge, La.-based distributor posted $1.1 billion in total revenue, compared to $987.8 million in 2013, a 10.4-percent hike.
The fourth quarter was a strong one for H&E, with $110.8 million in rental revenues, a 22.6-percent year-over-year boost. Total revenue increased 14.7 percent in the fourth quarter to $297.8 million, compared to $259.6 million in the same period in 2013.
H&E attributed its fourth quarter rental increase to a larger fleet, higher utilization and improved rates compared to a year ago. Parts and service revenues also jumped 16.6 percent in the fourth quarter. Gross margin was 31.9 percent, compared to 31.5 percent a year ago. EBITDA climbed 22.8 percent to $87.1 million compared to $70.9 million in the year-ago frame, yielding a margin of 29.2 percent compared to 27.3 percent in Q413.
Average time utilization, based on original equipment cost, was 72.4 percent in the fourth quarter, compared to 71.9 percent a year ago and 74.1 percent in the third quarter. Average time utilization, based on units available for rent, was 67.4 percent compared to 66 percent in Q413 and 68.3 percent in the third quarter.
“The fourth quarter represented a strong conclusion to a banner year for our company as we continued to successfully capitalize on the accelerating recovery in commercial construction markets,” said John Engquist, H&E Equipment Services’ CEO. “Our rental business is performing extremely well, with revenues increasing 22.6 percent in the fourth quarter compared to last year, as we continue to experience solid demand in all of our end-user markets. As a whole, 2014 was a strong year for our business as total revenues and EBITDA growth for the year was driven by a 19.2-percent year-over-year increase in rental revenue combined with average time utilization of 72.2 percent and our ability to achieve continual rate increases.
“We believe healthy growth opportunities will continue into 2015, driven by momentum in the non-residential construction markets and increasing industrial expansion in Louisiana and Texas. While there is concern that reduced oil prices may negatively impact the anticipated expansion in Louisiana and Texas, many projects are expected to continue as a result of low natural gas prices. In addition, oil and gas activities only accounted for approximately 13 percent of our total revenues in 2014, with the vast majority of our equipment being used in oil production rather than exploration, which historically has been less sensitive to changes in the price of oil. Finally we believe any adverse impact from decreased oil patch activity may be mitigated by increased activity in other industries as a result of lower fuel prices.”
Engquist added that H&E’s outlook is positive based on the current trends the company sees in its business, recent discussions with customers and a solid outlook for the construction markets.
At the end of 2014, the original acquisition cost of H&E’s rental fleet was $1.2 billion, an increase of $242.3 million from $1 billion at the end of 2013.
H&E Equipment Services is No. 8 on the RER 100.
