Essex Crane Rental Segment Revenue Drops 6.8 Percent in Second Quarter
Essex Crane equipment segment revenues were $8.2 million for the second quarter, compared to $8.8 million in the second quarter of 2014, including equipment rentals, transportation and used rental equipment sales revenue generated from the Essex Crane subsidiary. The 6.8-percent decrease was driven by a $600,000 decrease in rental revenue and a $400,000 drop in transportation revenue, partially offset by a $400,000 hike in used equipment sales.
The decrease in rental revenue was primarily driven by a decrease in large hydraulic attachment rental revenue.
Coast Crane equipment rentals segment revenues were $7.5 million for the quarter, compared to $7.6 million a year ago. Despite the decrease in overall revenue, gross profit increased by $500,000 or 17.8 percent because of stronger margins from equipment rental and used rental equipment sales.
“Demand for our hydraulic crawler cranes, tower cranes and heavy rough terrain cranes continued to show improvement both sequentially and year over year in the second quarter of 2015,” said Nick Matthews, president and CEO of Essex said. “The increased rental revenue generated from these assets, which make up the majority of the orderly liquidation value of our rental fleet, helped to offset the decrease in rental revenue generated from the large hydraulic attachments that were on rent last year.
“We continue discussions with the lenders of the Essex Crane Revolving Credit Facility to remedy the previously disclosed events of default. We believe the best value to our shareholders and our lenders is to restructure the Essex Crane subsidiary to unlock the value of its operating model. The company and the board of directors are in the process of engaging a financial advisor to assist the company in connection with its current financial and operational performance and strategic planning.”
Matthews added that while the company’s assets remain active, “we are cognizant of the concerns in the market related to oil prices that remain depressed. With the broad array of end markets that our assets serve, we have been able to continue to drive high levels of utilization in most of our key assets. While we have been encouraged by the current activity and look forward to the benefits of our recent cost savings initiative levels and we continue to see softness in our retail sales and our traditional crawler crane utilization levels.”
Matthews said the company remains cautious in its outlook for the remainder of the year.
Essex Crane Rental, based in Buffalo Grove, Ill., is No. 52 on the RER 100.
