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    6721af6501ddf484665e944e He Rentals Victoria Tx Construction 24
    1. News & Analysis
    2. Headline News

    H&E Rentals Posts Modest 3.3-Percent Total Revenue Rise in Third Quarter

    Oct. 30, 2024
    Total revenues for Q324 totaled $384.9 million compared to $400.7 million in the third quarter of 2023, a 4-percent decline.

    H&E Rentals posted $326.2 million in equipment rental revenues in the third quarter of 2024, compared to $315.8 million in the third quarter of 2023, a 3.3-percent increase. Total revenues for Q324 totaled $384.9 million compared to $400.7 million in the third quarter of 2023, a 4-percent decline.

    The primary decline came from decreased sales of rental equipment, which dropped from $52.7 million in Q324 to $27.8 million in the recently concluded quarter, a 47.3-percent plunge. Sales of new equipment increased from $12.6 million a year ago to $14.1 million this year, an 11.2-percent hike. Parts, service and other declined from $19.5 million to $16.8 million, a 14-percent drop.

    Adjusted EBITDA in the third quarter totaled $175.3 million, compared to $191.4 million a year ago, an 8.4-percent decline. Adjusted EBITDA margins were 45.6 percent of revenues compared to 47.8 percent a year ago. Average time utilization based on original equipment cost was 67.6 percent compared to 70 percent a year ago. The company’s rental fleet, based on OEC, closed the third quarter of 2024 at slightly less than $3 billion, an 8.1 percent year-over-year increase.

    Average rental rates declined 0.1 percent compared to the third quarter of 2023, and declined 0.6 percent compared to the second quarter.

    “Industry fundamentals in the third quarter continued to trail year-ago measures,” said Brad Barber, CEO of H&E Rentals. “Physical fleet utilization averaged 67.6 percent, or 240 basis points below the third quarter of 2023, evidence of the lower customer demand and a lingering modest oversupply of equipment. On a sequential quarterly basis, utilization improved 120 basis points. In addition, rental rates declined 0.1 percent compared to the prior-year quarter and were down 0.6 percent from the second quarter of 2024. Despite weakness in these key metrics, rental revenues grew 2.8 percent compared to the year-ago quarter due largely to the steady expansion of our branch count since the close of the third quarter of 2023. Finally, gross fleet expenditures in the quarter were $131.3 million, resulting in gross expenditures through the first nine months of 2024 of $327.8 million. We concluded the third quarter with a fleet original equipment cost of slightly below $3.0 billion.”

    Strong third quarter expansion

    Barber acknowledged H&E’s expansion. “A record number of eight branches were added in the third quarter, while a ninth branch was opened in the month of October,” he said. “The strong outcome reflected the outstanding execution of our accelerated new location program, which has achieved a record 16 additional locations in 2024, exceeding our stated expansion expectation. Our U.S. geographic coverage through September 30, 2024, improved to 157 locations across 32 states. When accounting for both new locations and branches added through acquisition, our branch count is up more than 14 percent in 2024 and approximately 54 percent since the close of 2021. Both measures are dominant accomplishments in our industry.”  

    Barber remains positive about expectations going forward.

    “Construction spending in the U.S. continues to demonstrate the slowing rate of growth observed over the first half of 2024,” he cackled. “We believe a trend of moderating activity will persist through the remainder of the year, with physical fleet utilization and rental rates below year-ago measures. Beyond the fourth quarter, the developing outlook for our industry is more encouraging into 2025. The Dodge Momentum Index, a leading indicator of construction spending, has exhibited gains for five of the last six months, while construction employment remains on a steady upward trajectory. Also, a cycle of easing interest rates is expected to have positive implications for local construction activity as projects are reevaluated under more favorable lending conditions. Finally, the strong expansion of mega projects remains a significant driver of growth for our industry, both today and into the future. Our branch expansion has led to a greater and more diverse exposure to mega projects, including a growing presence on data centers, solar and wind farms and LNG export facilities.” 

    For the first nine months of the year, total revenues were $1,1432.5 million compared to $1,083.4 million for the first nine months of 2023, a 4.5-percent. Equipment rental revenue for the first nine months of 2024 was $933.9 million, compared to $869.3 million, a 7.4-percent hike. Sales of rental equipment for the first nine months were $110.8 million, down from $124.5 million in the year-ago period, a 10.9-percent drop.

    Based in Baton Rouge, La., H&E Rentals is No. 6 on the RER 100.

    About the Author

    Michael Roth | Editor

    Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.