Rental Revenues Increase in First Quarter for H&E Equipment Services
H&E Equipment Services decreased first quarter revenues 8.2 percent to $226.8 million compared to $247 million in the first quarter of 2016. Rental revenues, on the other hand, jumped 4.4 percent to $107.3 million in the quarter compared to $102.8 million a year ago.
Net income was $5.4 million in the first quarter compared to $5.6 million in the year-ago quarter. EBITDA was $68.8 million, flat compared to $69.1 million in Q116. EBITDA margin was 30.3 percent compared 28 percent in the year-ago frame.
New equipment sales dropped 40.1 percent to $34.3 million compared to $57.2 million a year ago. Used equipment sales increased 4.7 percent to $28.9 million compared to $27.6 million last year. Gross margin was 34.2 percent compared to 32.9 percent a year ago. Rental gross margins were 44.8 percent in the first quarter compared to 45.3 percent last year.
Average time utilization based on OEC was 68.5 percent compared to 66.3 percent a year ago. Average time utilization based on units available for rent was 66 percent compared to 64.6 percent in Q116.
Average rental fleet age at the end of the quarter was 34.1 months compared to the industry average of 41.9 months.
“The first quarter results along with the current trends in our business have reinforced our expectations for 2017,” said John Engquist, H&E Equipment Services CEO. “Our rental business performed well in the first quarter, with revenues increasing 4.4 percent from a year ago, margins holding solid at 44.8 percent and rates down only 0.5 percent year over year. As we anticipated, the ongoing challenges in the new equipment component of our distribution business persisted, due primarily to weak crane demand. We also expect our used equipment sales to trend down during the balance of this year as we intentionally sell less of our rental fleet as a result of higher anticipated rental demand in our non-residential construction markets.”
Engquist added the company believes the opportunities that exist for the business are encouraging as demand for rental equipment is increasing throughout its regions. “The environment in our Gulf Coast region remains positive as a result of several factors,” he noted. “Texas, our largest market continues to experience a very healthy economy that is driving an array of non-residential projects. The energy markets are also improving as a result of increased shale drilling activity. In both Texas and Louisiana, a solid line-up of large industrial projects are either underway, at breaking ground stage, or scheduled for construction over the next few years.”
H&E Equipment Services is based in Baton Rouge, La.
