NES Rentals Holdings last week filed its Form 10-K with the United States Securities and Exchange Commission for the year ended December 31, 2003. Total revenues for 2003 were $567.1 million compared with $621.3 million for 2002, a difference of $54.2 million.
Rental and service revenues accounted for 85.1 percent of the 2003 total revenues, compared to 82.6 percent of 2002 total revenues. The company’s gross profit and operating margins improved in 2003 from 2002 as a result of substantial cost-cutting measures taken throughout the year. The cost-cutting measures included closing and consolidating branch operations, centralizing shared services and administrative functions and rationalizing NES’ rental equipment mix.
“The company performed much better than expected through this difficult period of time,” said Michael Milligan, chief financial officer. “The financial statements for 2003 reflect the write-off of goodwill and other debt issuance costs that represent non-cash items. NES Rentals now starts off on solid financial ground with a new $500 million credit facility from a bank group led by our long-term agent, Wachovia Bank. We’re fortunate because our current cash position will allow us to increase our fleet’s size, and improve fleet mix and quality.”
According to Doug Booth, NES Rentals interim chief operating officer and a partner with Carl Marks, the new $500 million credit facility will enable NES Rentals to spend about $90 million in capital expenditures in 2004 and aggressively revitalize its fleet of 45,000 pieces of equipment. Fleet revitalization is central to NES’ reorganization and the company plans to reinvest heavily in its fleet over the next several years to meet the needs of its customers.
“We also have successfully consolidated more than a dozen separate information systems into a single database and established a Shared Services Center, which will help us more effectively manage our fleet and enhance customer service nationwide,” said Booth.
NES filed for reorganization on June 27, 2003, and successfully emerged from Chapter 11 protection this past February with the assistance of Carl Marks Consulting Group. The company has 160 locations in 34 states and Canada.
Chicago-based NES Rental Holdings is No. 5 on the RER 100.
