Custom Truck One Source First Quarter Increases on Rental Demand
Custom Truck One Source posted total quarterly revenue of $366.5 million in the first quarter of 2022, driven primarily by strong rental demand. CTOS was acquired by Nesco Holdings on April 1, 2021 and CTOS and Nesco have continued doing business with the CTOS name. CTOS posted $119.1 million in first quarter 2022 rental revenue, compared to $100.2 million in pro-forma rental revenue in the first quarter of 2021 when CTOS and Nesco operated separately, an 8.9-percent year-over-year increase. The combined companies reported $114.1 million in fourth quarter 2021.
During the quarter, Custom Truck One Source closed on the acquisition of HiRail Leasing Group, a leader in rental equipment for the Canadian rail market, for approximately $51.6 million, including $5.6 million in fleet-related purchase price adjustments.
The first quarter rental revenue increased because of improved rental equipment utilization and steady rental yield.
Management said first quarter total rental revenue declined 4.4 percent from Q421 as a result of customary seasonal slowdowns in infrastructure projects. However, the 8.9 percent improvement compared to the pro-forma Q121 results reflects CTOS’ continued expansion of its rental fleet and pricing gains.
The company’s Truck and Equipment Sales segment posted $167.8 million in revenue in first quarter 2022 compared to $177.2 percent in the fourth quarter of 2021 as a result of supply chain challenges related to the segment’s inventory suppliers. Gross profit improved by 1.8 percent to $23.8 million in the first quarter of 2022 compared to $23.4 million in the fourth quarter of 2021. TES continues to see strength in product demand as sales order backlog grew by 42.4 percent compared to the end of Q421.
Strong results despite headwinds
"I am proud of the efforts of our entire team, who delivered very strong first quarter results despite the continued headwinds stemming from supply chain constraints and inflation," said Fred Ross, CEO of CTOS. "Our first quarter results provide a solid foundation for us to build upon over the balance of the year. As we move into the second year post the transaction, we have largely shifted our efforts away from the integration and toward the optimization of our operations to fully realize the benefits of our scale and our one-stop-shop business model. Custom Truck's commitment to our customers remains unmatched and we are steadfastly focused on meeting continued robust customer demand across all three of our business segments."
Custom Truck One Source, based in Kansas City, Mo., is No. 11 on the new RER 100.
