Herc Rentals Ups Rental Revenue 15.1 Percent in First Quarter
Herc Holdings posted $369.1 million in equipment rental revenue for the first quarter, compared to $320.6 million in the first quarter of 2017, a 15.1-percent increase. Total revenue was $431.3 million for the first quarter compared to $389.4 million in last year’s first quarter, a 10.8-percent hike. The company posted a net loss of $10.1 million compared to a net loss of $39.2 million in the first quarter of 2017.
Herc Rentals’ rental rates improved 2.8 percent in the first quarter compared to the year-ago quarter. Adjusted EBITDA increased 35.7 percent to $132.7 million in the first quarter compared to $97.8 million a year ago.
“Our strong start to 2018 is evidence that our strategy is working,” said Larry Silber, Herc Rentals president and CEO. “Our first quarter growth in rental revenue of 15.1 percent reflects the positive impact of our strategic initiatives in driving volume with average OEC fleet on rent increasing 7.1 percent. Our focus on urban markets and the continued improvement in fleet diversification and mix contributed to the strong year over year results. Our customer-focused initiatives have helped increase our business with current customers and supported growth in new local accounts in the quarter. In addition, we are pleased with the progress we are making in improving flow-through so far this year.”
Dollar utilization was 35.3 percent in the first quarter, up 330 basis points compared to the prior-year period, primarily because of higher rental activity, which increased maintenance and transportation costs, and investments in branch operating personnel to support revenue growth.
The company reported net fleet capital expenditures of $29.6 million for the first quarter of 2018. Gross fleet capital expenditures were $82.5 million and disposals were $52.9 million. Average fleet age was approximately 49 months as of March 31, 2018.
Herc said the double-digit gain in rental revenue reflected strong rental performance in ProSolutions and ProContractor categories, and increased overall rental revenue in current and new customer accounts.
Silber said Herc is raising its 2018 adjusted EBITDA guidance. “At the same time, we are focused on initiatives to improve our effectiveness in controlling transportation, maintenance and fuel costs,” Silber said. “We recently engaged a major third-party logistics firm to work with our branch network and are in the process of implementing regional fuel purchasing programs. We are also focused on enhancing our working capital position by improving our accounts receivables and other cash-generating programs.”
Herc is raising its adjust EBITDA guidance from the previous range of $620 million to $655 million to a range from $630 million to $660 million.
Based in Bonita Springs, Fla., Herc Rentals is No. 3 on the RER 100.
