Equipment Rental Revenue Increases Slightly in Q4, Full Year for H&E
Equipment rental revenue increased slightly for H&E Equipment Services in the fourth quarter to $115.2 million, compared with $114.95 million in the fourth quarter of 2015. For the full year, equipment rental revenue also increased slightly from $443 million in 2015 to $445.2 million in 2016.
Full year total revenues for H&E declined from $1.039 billion in 2015 to $978.1 million, a 5.9-percent slide. Total revenues for the fourth quarter slid 10.6 percent from $273.2 million in 2015 to $244.3 million in 2016.
EBITDA was $78.9 million in the fourth quarter compared to $81.3 million in Q415. Net income, however, increased from $12 million in the fourth quarter of 2015 to $12.4 million in Q416. Rental gross margins were 47.7 percent in the recently concluded frame compared to 47.5 percent a year ago. Dollar utilization was 34.3 percent compared to 35.5 percent in Q415.
“2016 was a solid year for our company and industry as the strength in the non-residential construction markets continued into the fourth quarter,” said John Engquist H&E Equipment Services CEO. “Demand for rental equipment was healthy, with both revenues and margins up slightly from a year ago. Ongoing weakness in crane demand continued to negatively affect our distribution business, with new and used crane sales down $23 million on a combined basis.
“We are extremely encouraged about the trends and opportunities for our business in 2017 and beyond. Customer sentiment was positive prior to the election but it has improved further post-election according to many metrics. While substantial uncertainty exists regarding the new administration’s proposed infrastructure stimulus plan in terms of total funding, project mix and timing, a material spend could fuel solid industry growth and extend the cycle for years. While it is unlikely the industry would benefit from any infrastructure spending until 2018 at the earliest, we do believe the new administration’s pro-business position could accelerate construction spending in 2017. The energy markets are also improving as shale drillers in the Permian and Eagle Ford Basins are ramping up exploration activity as they expect to generate positive returns at current oil prices. For the first time since 2014, we opportunistically moved fleet back into select energy-focused markets during the fourth quarter.”
At the end of the fourth quarter of 2016, the original acquisition cost of the company’s rental fleet was $1.3 billion, an increase of $47.4 million from the end of the fourth quarter of 2015.
Net income for the company in 2016 was $37.2 million, compared to $44.3 million in 2015. EBITDA for 2016 was $302.3 million compared to $316.2 million in 2015, a 4.4-percent decrease.
H&E Equipment Services, headquartered in Baton Rouge, La., is No. 8 on the RER 100.
