UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
(Exact name of registrant as specified in its charter)
Commission File Number:
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(State or other jurisdiction of |
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(IRS Employer |
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incorporation) |
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Identification No.) |
(Address of principal executive offices, including zip code)
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(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
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Title of Each Class |
Trading Symbol(s) |
Name of Each Exchange on Which Registered |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On October 24, 2019, we issued a press release announcing our financial results for the three month period ended September 30, 2019. A copy of the press release is attached as Exhibit 99.1.
The information in this Form 8-K and the attached exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01 Other Events
EBITDA and Adjusted EBITDA are non-GAAP measures as defined under the rules of the SEC. We define EBITDA as net income (loss) before interest expense, income taxes, depreciation and amortization. We define Adjusted EBITDA for the periods presented as EBITDA adjusted for merger costs.
We have recast certain prior year period information to conform to the current year presentation of hauling fees and related cost of revenues included within Rental Revenues rather than included within Other Revenues as previously reported. Upon our adoption of the new lease accounting guidance (ASC 842), certain ancillary fees associated with our equipment rental activities, such as damage waiver income, environmental fees and fuel and other recovery fees, are properly included within our Rental Revenue segment rather than Other Revenues as previously reported. Because we elected to not recast prior periods upon ASC 842 adoption, we recast and presented these amounts on an “As Adjusted” basis to conform to the current year presentation. We use these non-GAAP metrics to provide further detail to evaluate the period over period performance of the Company, and believe these may be useful to investors for this reason. However, you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP.
We use EBITDA and Adjusted EBITDA in our business operations to, among other things, evaluate the performance of our business, develop budgets and measure our performance against those budgets. We also believe that analysts and investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluate a company’s overall operating performance. However, EBITDA and Adjusted EBITDA have material limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. We consider them useful tools to assist us in evaluating performance because they eliminate items related to capital structure, taxes and non-cash charges. The items that we have eliminated in determining EBITDA for the periods presented are interest expense, income taxes, depreciation of fixed assets (which includes rental equipment and property and equipment) and amortization of intangible assets and, in the case of Adjusted EBITDA, any other non-recurring items described above applicable to the particular period. However, some of these eliminated items are significant to our business. For example, (i) interest expense is a necessary element of our costs and ability to generate revenue because we incur a significant amount of interest expense related to our outstanding indebtedness; (ii) payment of income taxes is a necessary element of our costs; and (iii) depreciation is a necessary element of our costs and ability to generate revenue because rental equipment is the single largest component of our total assets and we recognize a significant amount of depreciation expense over the estimated useful life of this equipment. Any measure that eliminates components of our capital structure and costs associated with carrying significant amounts of fixed assets on our consolidated balance sheet has material limitations as a performance measure. In light of the foregoing limitations, we do not rely solely on EBITDA and Adjusted EBITDA as performance measures and also consider our GAAP results. EBITDA and Adjusted EBITDA are not measurements of our financial performance under GAAP and should not be considered alternatives to net income, operating income or any other measures derived in accordance with GAAP. Because EBITDA and Adjusted EBITDA may not be calculated in the same manner by all companies, these measures may not be comparable to other similarly titled measures by other companies.
Item 9.01 Financial Statements and Exhibits.
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Exhibit 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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Date: October 24, 2019 |
By: |
/s/ Leslie S. Magee |
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Leslie S. Magee |
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Chief Financial Officer |
Exhibit 99.1
News Release
Contacts:
Leslie S. Magee
Chief Financial Officer
225-298-5261
lmagee@he-equipment.com
Kevin S. Inda
Vice President of Investor Relations
225-298-5318
kinda@he-equipment.com
H&E Equipment Services Reports Third Quarter 2019 Results
BATON ROUGE, Louisiana -- (October 24, 2019) -- H&E Equipment Services, Inc. (NASDAQ: HEES) today announced results for the third quarter ended September 30, 2019.
THIRD QUARTER 2019 SUMMARY
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Revenues increased 9.6% to $353.0 million versus $322.1 million a year ago. |
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Net income increased 33.4% to $28.4 million in the third quarter compared to net income of $21.3 million a year ago. The effective income tax rate was 26.7% in the third quarter of 2019 and 26.4% in the third quarter of 2018. |
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Adjusted EBITDA increased 17.9% to $127.5 million in the third quarter compared to $108.2 million a year ago, yielding a margin of 36.1% of revenues compared to 33.6% a year ago. |
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Total equipment rental revenues for the third quarter of 2019 were $204.1 million, an increase of $31.4 million, or 18.2%, compared to $172.8 million a year ago (as adjusted).(1) Rental revenues (as previously reported) for the third quarter of 2019 were $184.8 million, an increase of $28.8 million, or 18.4%, compared to $156.0 million in the third quarter of 2018.(1) |
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New equipment sales decreased 4.7% to $65.0 million in the third quarter compared to $68.2 million a year ago. |
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Used equipment sales increased 2.9% to $31.2 million in the third quarter compared to $30.3 million a year ago. |
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Gross margin was 37.4% compared to 35.6% a year ago. The increase in gross margin was largely the result of a shift in revenue mix to rentals and higher equipment rental gross margins. |
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Total equipment rental gross margins were 46.3% in the third quarter of 2019 compared to 45.2% in the third quarter of 2018 (as adjusted).(1) Rental gross margins (as previously reported) were 50.8% in the third quarter of 2019 compared to 50.0% a year ago.(1) |
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Average time utilization (based on original equipment cost) was 71.4% compared to 71.0% a year ago. The size of the Company’s rental fleet based on original acquisition cost increased 12.3% from a year ago, to $2.0 billion. |
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(1) |
For a reconciliation of adjustments to prior year data and historical presentations, see page 7. |
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 2
October 24, 2019
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Dollar utilization was 37.5% in the third quarter compared to 35.9% a year ago. |
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Average rental fleet age at September 30, 2019, was 34.9 months compared to an industry average age of 45.6 months. |
Brad Barber, H&E Equipment Services’ chief executive officer and president, said, “Our third quarter results were solid as we continued to experience broad-based demand for rental equipment throughout our end-user construction markets. We achieved a 2.4% improvement in rates compared to a year ago and physical utilization increased 40 basis points to 71.4%, which helped drive an 18.4% increase in rental revenues.”
Barber concluded, “We are pleased with our year-to-date performance and ability to capitalize on the ongoing strength and opportunities in the well-diversified construction markets we serve throughout our 23-state footprint. Increasing the scale of our rental business continues to be a strategic priority for our business. We expect to achieve this goal through organic growth, acquisitions and warm-start store openings. Based on our current performance, solid level of project activity and our customers’ feedback, our market outlook remains positive.”
FINANCIAL DISCUSSION FOR THIRD QUARTER 2019:
Revenue
Total revenues increased 9.6% to $353.0 million in the third quarter of 2019 from $322.1 million in the third quarter of 2018. Total equipment rental revenues increased 18.2% to $204.1 million compared to $172.8 million in the third quarter of 2018 (as adjusted).(1) Rental revenues (as previously reported) increased 18.4% to $184.8 million compared to $156.0 million in the third quarter of 2018.(1) New equipment sales were $65.0 million compared to $68.2 million a year ago. Used equipment sales increased 2.9% to $31.2 million compared to $30.3 million a year ago. Parts sales were $31.5 million, the same as the year ago period. Service revenues increased 10.2% to $18.1 million compared to $16.4 million a year ago.
Gross Profit
Gross profit increased 15.2% to $132.1 million from $114.7 million in the third quarter of 2018. Gross margin was 37.4% for the quarter ended September 30, 2019, as compared to 35.6% for the quarter ended September 30, 2018. On a segment basis, gross margin on total equipment rentals was 46.3% in the third quarter of 2019 compared to 45.2% in the third quarter of 2018 (as adjusted).(1) Rental margins (as previously reported) were 50.8% in the third quarter of 2019 compared to 50.0% a year ago.(1) On average, rental rates were 2.4% higher than rates in the third quarter of 2018. Time utilization (based on original equipment cost) was 71.4% in the third quarter of 2019 compared to 71.0% a year ago.
Gross margins on new equipment sales were 11.6% in the third quarter compared to 11.5% a year ago. Gross margins on used equipment sales were 31.3% compared to 32.3% a year ago. Gross margins on parts sales were 26.4% in the third quarter of 2019 compared to 26.5% a year ago. Gross margins on service revenues increased to 67.4% for the third quarter of 2019 compared to 65.7% in the third quarter of 2018.
Rental Fleet
At the end of the third quarter of 2019, the original acquisition cost of the Company’s rental fleet was $2.0 billion, an increase of $216.2 million from the end of the third quarter of 2018. Dollar utilization for the third quarter of 2019 was 37.5% compared to 35.9% for the third quarter of 2018.
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(1) |
For a reconciliation of adjustments to prior year data and historical presentations, see page 7. |
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 3
October 24, 2019
Selling, General and Administrative Expenses
SG&A expenses for the third quarter of 2019 were $77.3 million compared with $70.3 million the prior year, a $7.0 million, or 9.9%, increase. SG&A expenses in the third quarter of 2019 as a percentage of total revenues were 21.9% compared to 21.8% a year ago. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses increased $3.1 million, primarily as a result of our acquisition since September 30, 2018, and a larger workforce and higher incentive compensation related to increased profitability. Facility related expenses, primarily rent expense, increased $1.0 million. Insurance expense increased $0.7 million and depreciation and amortization increased $0.6 million. Expenses related to Greenfield branch expansions increased $0.8 million compared to a year ago.
Income from Operations
Income from operations for the third quarter of 2019 increased 22.5% to $55.5 million, or 15.7% of revenues, compared to $45.3 million, or 14.1% of revenues, a year ago.
Interest Expense
Interest expense was $17.3 million for the third quarter of 2019 compared to $16.7 million a year ago.
Net Income
Net income was $28.4 million, or $0.79 per diluted share, in the third quarter of 2019 compared to net income of $21.3 million, or $0.59 per diluted share, in the third quarter of 2018. The effective income tax rate was 26.7% in the third quarter of 2019 and 26.4% in the third quarter of 2018.
Adjusted EBITDA
Adjusted EBITDA for the third quarter of 2019 increased 17.9% to $127.5 million compared to $108.2 million in the third quarter of 2018. Adjusted EBITDA as a percentage of revenues was 36.1% compared with 33.6% in the third quarter of 2018.
Non-GAAP Financial Measures
This press release contains certain Non-GAAP measures (EBITDA, Adjusted EBITDA and recasting of certain revenue and cost of revenue numbers detailed below). Please refer to our Current Report on Form 8-K for a description of these measures and of our use of these measures. These measures as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures are not a measurement of financial performance or liquidity under GAAP and should not be considered as alternatives to the Company's other financial information determined under GAAP.
Conference Call
The Company’s management will hold a conference call to discuss third quarter 2019 results today, October 24, 2019 at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 323-794-2575 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on October 24, 2019, and will continue through November 2, 2019, by dialing 719-457-0820 and entering the confirmation code 8854109.
The live broadcast of H&E Equipment Services’ quarterly conference call will be available online at www.he-equipment.com on October 24, 2019, beginning at 10:00 a.m. (Eastern Time) and will continue to be available for 30 days. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.he-equipment.com prior to the call. The presentation materials will be in Adobe Acrobat format.
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 4
October 24, 2019
About H&E Equipment Services, Inc.
The Company is one of the largest integrated equipment services companies in the United States with 96 full-service facilities throughout the West Coast, Intermountain, Southwest, Gulf Coast, Mid-Atlantic and Southeast regions. The Company is focused on heavy construction and industrial equipment and rents, sells, and provides parts and services support for four core categories of specialized equipment: (1) hi-lift or aerial platform equipment; (2) cranes; (3) earthmoving equipment; and (4) industrial lift trucks. By providing equipment rental, sales, on site parts, repair, and maintenance functions under one roof, the Company is a one-stop provider for its customers' varied equipment needs. This full service approach provides the Company with multiple points of customer contact, enabling it to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal and provides cross-selling opportunities among its new and used equipment sales, rentals, parts sales, and services operations.
Forward-Looking Statements
Statements contained in this press release that are not historical facts, including statements about H&E’s beliefs and expectations, are “forward-looking statements” within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) general economic conditions and construction and industrial activity in the markets where we operate in North America; (2) our ability to forecast trends in our business accurately, and the impact of economic downturns and economic uncertainty in the markets we serve; (3) the impact of conditions in the global credit and commodity markets and their effect on construction spending and the economy in general; (4) relationships with equipment suppliers; (5) increased maintenance and repair costs as we age our fleet and decreases in our equipment’s residual value; (6) our indebtedness; (7) risks associated with the expansion of our business and any potential acquisitions we may make, including any related capital expenditures, or our inability to consummate such acquisitions; (8) our possible inability to integrate any businesses we acquire; (9) competitive pressures; (10) security breaches and other disruptions in our information technology systems; (11) adverse weather events or natural disasters; (12) compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and (13) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release. These statements are based on the current beliefs and assumptions of H&E’s management, which in turn are based on currently available information and important, underlying assumptions. H&E is under no obligation to publicly update or revise any forward-looking statements after this press release, whether as a result of any new information, future events or otherwise. Investors, potential investors, security holders and other readers are urged to consider the above mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 5
October 24, 2019
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CONSOLIDATED STATEMENTS OF INCOME (unaudited) |
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(Amounts in thousands, except per share amounts) |
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Three Months Ended |
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Nine Months Ended |
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Sept. 30, |
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Sept. 30, |
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Sept. 30, |
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Sept. 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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Revenues: |
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Equipment rentals |
$ 204,132 |
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$ 165,415 |
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$ 572,563 |
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$ 455,167 |
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New equipment sales |
65,010 |
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68,233 |
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177,709 |
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183,265 |
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Used equipment sales |
31,180 |
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30,294 |
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96,942 |
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87,287 |
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Parts sales |
31,499 |
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31,484 |
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93,798 |
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89,916 |
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Service revenues |
18,105 |
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16,426 |
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50,398 |
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48,250 |
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Other |
3,071 |
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10,289 |
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8,822 |
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29,102 |
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Total revenues |
352,997 |
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322,141 |
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1,000,232 |
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892,987 |
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Cost of revenues: |
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Equipment rentals |
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Rental depreciation |
63,065 |
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55,060 |
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181,647 |
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152,700 |
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Rental expense |
27,889 |
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22,936 |
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79,676 |
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66,281 |
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Rental other |
18,620 |
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15,007 |
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52,742 |
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40,637 |
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109,574 |
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93,003 |
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314,065 |
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259,618 |
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New equipment sales |
57,475 |
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60,394 |
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156,638 |
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162,465 |
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Used equipment sales |
21,409 |
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20,512 |
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63,742 |
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59,221 |
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Parts sales |
23,171 |
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23,129 |
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68,750 |
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65,677 |
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Service revenues |
5,898 |
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5,628 |
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16,261 |
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16,430 |
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Other |
3,342 |
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4,745 |
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10,167 |
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14,158 |
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Total cost of revenues |
220,869 |
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207,411 |
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629,623 |
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577,569 |
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Gross Profit |
132,128 |
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114,730 |
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370,609 |
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315,418 |
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Selling, general, and administrative expenses |
77,296 |
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70,346 |
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233,783 |
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205,272 |
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Merger costs |
47 |
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219 |
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314 |
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439 |
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Gain on sales of property and equipment, net |
718 |
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1,153 |
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2,339 |
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6,040 |
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Income from Operations |
55,503 |
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45,318 |
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138,851 |
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115,747 |
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Interest expense |
(17,331) |
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(16,715) |
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(51,453) |
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(47,061) |
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Other income, net |
588 |
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368 |
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1,609 |
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1,222 |
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Income before provision for income taxes |
38,760 |
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28,971 |
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89,007 |
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69,908 |
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Provision for income taxes |
10,329 |
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7,657 |
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23,719 |
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18,345 |
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Net income |
$ 28,431 |
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$21,314 |
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$65,288 |
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$ 51,563 |
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NET INCOME PER SHARE: |
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Basic – Net income per share |
$0.79 |
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$0.60 |
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$1.82 |
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$1.45 |
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Basic – Weighted average number of common shares outstanding |
35,893 |
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35,719 |
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35,835 |
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35,649 |
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Diluted – Net income per share |
$0.79 |
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$0.59 |
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$1.81 |
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$1.44 |
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Diluted – Weighted average number of common shares outstanding |
36,046 |
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35,926 |
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36,012 |
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35,904 |
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Dividends declared per common share |
$0.275 |
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$0.275 |
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$0.825 |
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$0.825 |
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 6
October 24, 2019
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SELECTED BALANCE SHEET DATA (unaudited) |
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(Amounts in thousands) |
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September 30, |
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December 31, |
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2019 |
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2018 |
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Cash |
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$10,596 |
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$16,677 |
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Rental equipment, net |
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1,262,663 |
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1,141,498 |
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Total assets |
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2,068,835 |
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1,727,181 |
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Total debt (1) |
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1,254,741 |
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1,121,487 |
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Total liabilities |
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1,774,917 |
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1,470,378 |
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Stockholders’ equity |
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293,918 |
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256,803 |
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Total liabilities and stockholders’ equity |
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$2,068,835 |
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$1,727,181 |
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(1) |
Total debt consists of the aggregate amounts on the senior secured credit facility, senior unsecured notes and finance or capital lease obligations. |
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H&E EQUIPMENT SERVICES, INC. UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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(Amounts in thousands) |
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2019 |
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2018 |
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2019 |
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2018 |
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Net Income |
$28,431 |
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$21,314 |
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$65,288 |
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$51,563 |
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Interest Expense |
17,331 |
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16,715 |
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51,453 |
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47,061 |
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Provision for income taxes |
10,329 |
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7,657 |
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23,719 |
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18,345 |
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Depreciation |
70,320 |
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61,342 |
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202,610 |
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171,067 |
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Amortization of intangibles |
1,042 |
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930 |
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3,091 |
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2,415 |
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EBITDA |
$127,453 |
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$107,958 |
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$346,161 |
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$290,451 |
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Merger costs |
47 |
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219 |
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314 |
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439 |
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Adjusted EBITDA |
$127,500 |
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$108,177 |
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$346,475 |
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$290,890 |
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H&E Equipment Services Reports Third Quarter 2019 Results
Page 7
October 24, 2019
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UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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(Amounts in thousands) |
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Quarter Ended 9/30/18(1) |
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Quarter Ended 9/30/19 |
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As Previously Reported |
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Hauling Fees(a) |
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As Currently Reported |
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Other Rental Fees(b) |
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As Adjusted |
|
As Currently Reported |
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
$ 156,037 |
|
$ - |
|
$ 156,037 |
|
$ - |
|
$ 156,037 |
|
$ 184,797 |
|
Rentals other |
- |
|
9,378 |
|
9,378 |
|
7,356 |
|
16,734 |
|
19,335 |
|
Total equipment rentals |
156,037 |
|
9,378 |
|
165,415 |
|
7,356 |
|
172,771 |
|
204,132 |
|
New equipment sales |
68,233 |
|
- |
|
68,233 |
|
- |
|
68,233 |
|
65,010 |
|
Used equipment sales |
30,294 |
|
- |
|
30,294 |
|
- |
|
30,294 |
|
31,180 |
|
Parts sales |
31,484 |
|
- |
|
31,484 |
|
- |
|
31,484 |
|
31,499 |
|
Services revenues |
16,426 |
|
- |
|
16,426 |
|
- |
|
16,426 |
|
18,105 |
|
Other |
19,667 |
|
(9,378) |
|
10,289 |
|
(7,356) |
|
2,933 |
|
3,071 |
|
Total revenues |
322,141 |
|
- |
|
322,141 |
|
- |
|
322,141 |
|
352,997 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Rental depreciation |
55,060 |
|
- |
|
55,060 |
|
- |
|
55,060 |
|
63,065 |
|
Rental expense |
22,936 |
|
- |
|
22,936 |
|
- |
|
22,936 |
|
27,889 |
|
Rental other |
- |
|
15,007 |
|
15,007 |
|
1,673 |
|
16,680 |
|
18,620 |
|
|
77,996 |
|
15,007 |
|
93,003 |
|
1,673 |
|
94,676 |
|
109,574 |
|
New equipment sales |
60,394 |
|
- |
|
60,394 |
|
- |
|
60,394 |
|
57,475 |
|
Used equipment sales |
20,512 |
|
- |
|
20,512 |
|
- |
|
20,512 |
|
21,409 |
|
Parts sales |
23,129 |
|
- |
|
23,129 |
|
- |
|
23,129 |
|
23,171 |
|
Services revenues |
5,628 |
|
- |
|
5,628 |
|
- |
|
5,628 |
|
5,898 |
|
Other |
19,752 |
|
(15,007) |
|
4,745 |
|
(1,673) |
|
3,072 |
|
3,342 |
|
Total cost of revenues |
207,411 |
|
- |
|
207,411 |
|
- |
|
207,411 |
|
220,869 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
78,041 |
|
- |
|
78,041 |
|
- |
|
78,041 |
|
93,843 |
|
Rentals other |
- |
|
(5,629) |
|
(5,629) |
|
5,683 |
|
54 |
|
715 |
|
|
78,041 |
|
(5,629) |
|
72,412 |
|
5,683 |
|
78,095 |
|
94,558 |
|
New equipment sales |
7,839 |
|
- |
|
7,839 |
|
- |
|
7,839 |
|
7,535 |
|
Used equipment sales |
9,782 |
|
- |
|
9,782 |
|
- |
|
9,782 |
|
9,771 |
|
Parts sales |
8,355 |
|
- |
|
8,355 |
|
- |
|
8,355 |
|
8,328 |
|
Services revenues |
10,798 |
|
- |
|
10,798 |
|
- |
|
10,798 |
|
12,207 |
|
Other |
(85) |
|
5,629 |
|
5,544 |
|
(5,683) |
|
(139) |
|
(271) |
|
Total gross profit |
$114,730 |
|
$ - |
|
$114,730 |
|
$ - |
|
$114,730 |
|
$ 132,128 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
50.0% |
|
- |
|
50.0% |
|
- |
|
50.0% |
|
50.8% |
|
Rentals other |
- |
|
-60.0% |
|
-60.0% |
|
77.3% |
|
0.3% |
|
3.7% |
|
|
50.0% |
|
-60.0% |
|
43.8% |
|
77.3% |
|
45.2% |
|
46.3% |
|
New equipment sales |
11.5% |
|
- |
|
11.5% |
|
- |
|
11.5% |
|
11.6% |
|
Used equipment sales |
32.3% |
|
- |
|
32.3% |
|
- |
|
32.3% |
|
31.3% |
|
Parts sales |
26.5% |
|
- |
|
26.5% |
|
- |
|
26.5% |
|
26.4% |
|
Services revenues |
65.7% |
|
- |
|
65.7% |
|
- |
|
65.7% |
|
67.4% |
|
Other |
-0.4% |
|
60.0% |
|
53.9% |
|
-77.3% |
|
-4.7% |
|
-8.8% |
|
Total gross margin |
35.6% |
|
- |
|
35.6% |
|
- |
|
35.6% |
|
37.4% |
|
(1) |
(a) We have recast the prior year period information to conform to the current year presentation of hauling fees and related cost of revenues included within Equipment Rentals rather than included within Other Revenues as previously reported. |
(b) Upon our adoption of the new lease accounting guidance (ASC 842), certain ancillary fees associated with our equipment rental activities, such as damage waiver income, environmental fees and fuel and other recovery fees, are properly included within our Rental Revenue segment rather than Other Revenues as previously reported. Because we elected to not recast prior periods upon ASC 842 adoption, the table above recasts these amounts on an “As Adjusted” basis to conform to the current year presentation.
|
(2) |
Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of income in this press release as a single line item, “Equipment Rentals”. The above table disaggregates our equipment rental revenues for discussion and analysis purposes only. |
- MORE -
H&E Equipment Services Reports Third Quarter 2019 Results
Page 8
October 24, 2019
|
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
|||||||||||
|
(Amounts in thousands) |
|||||||||||
|
|
Nine Months Ended 9/30/18(1) |
|
Nine Months Ended 9/30/19 |
||||||||
|
|
As Previously Reported |
|
Hauling Fees(a) |
|
As Currently Reported |
|
Other Rental Fees(b) |
|
As Adjusted |
|
As Currently Reported |
|
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals(2) |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
$ 429,227 |
|
$ - |
|
$ 429,227 |
|
$ - |
|
$ 429,227 |
|
$ 518,294 |
|
Rentals other |
- |
|
25,940 |
|
25,940 |
|
20,411 |
|
46,351 |
|
54,269 |
|
Total equipment rentals |
429,227 |
|
25,940 |
|
455,167 |
|
20,411 |
|
475,578 |
|
572,563 |
|
New equipment sales |
183,265 |
|
- |
|
183,265 |
|
- |
|
183,265 |
|
177,709 |
|
Used equipment sales |
87,287 |
|
- |
|
87,287 |
|
- |
|
87,287 |
|
96,942 |
|
Parts sales |
89,916 |
|
- |
|
89,916 |
|
- |
|
89,916 |
|
93,798 |
|
Services revenues |
48,250 |
|
- |
|
48,250 |
|
- |
|
48,250 |
|
50,398 |
|
Other |
55,042 |
|
(25,940) |
|
29,102 |
|
(20,411) |
|
8,691 |
|
8,822 |
|
Total revenues |
892,987 |
|
- |
|
892,987 |
|
- |
|
892,987 |
|
1,000,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COST OF REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
Rental depreciation |
152,700 |
|
- |
|
152,700 |
|
- |
|
152,700 |
|
181,647 |
|
Rental expense |
66,281 |
|
- |
|
66,281 |
|
- |
|
66,281 |
|
79,676 |
|
Rental other |
- |
|
40,637 |
|
40,637 |
|
4,640 |
|
45,277 |
|
52,742 |
|
|
218,981 |
|
40,637 |
|
259,618 |
|
4,640 |
|
264,258 |
|
314,065 |
|
New equipment sales |
162,465 |
|
- |
|
162,465 |
|
- |
|
162,465 |
|
156,638 |
|
Used equipment sales |
59,221 |
|
- |
|
59,221 |
|
- |
|
59,221 |
|
63,742 |
|
Parts sales |
65,677 |
|
- |
|
65,677 |
|
- |
|
65,677 |
|
68,750 |
|
Services revenues |
16,430 |
|
- |
|
16,430 |
|
- |
|
16,430 |
|
16,261 |
|
Other |
54,795 |
|
(40,637) |
|
14,158 |
|
(4,640) |
|
9,518 |
|
10,167 |
|
Total cost of revenues |
577,569 |
|
- |
|
577,569 |
|
- |
|
577,569 |
|
629,623 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS PROFIT |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
210,246 |
|
- |
|
210,246 |
|
- |
|
210,246 |
|
256,971 |
|
Rentals other |
- |
|
(14,697) |
|
(14,697) |
|
15,771 |
|
1,074 |
|
1,527 |
|
|
210,246 |
|
(14,697) |
|
195,549 |
|
15,771 |
|
211,320 |
|
258,498 |
|
New equipment sales |
20,800 |
|
- |
|
20,800 |
|
- |
|
20,800 |
|
21,071 |
|
Used equipment sales |
28,066 |
|
- |
|
28,066 |
|
- |
|
28,066 |
|
33,200 |
|
Parts sales |
24,239 |
|
- |
|
24,239 |
|
- |
|
24,239 |
|
25,048 |
|
Services revenues |
31,820 |
|
- |
|
31,820 |
|
- |
|
31,820 |
|
34,137 |
|
Other |
247 |
|
14,697 |
|
14,944 |
|
(15,771) |
|
(827) |
|
(1,345) |
|
Total gross profit |
$ 315,418 |
|
$ - |
|
$ 315,418 |
|
$ - |
|
$ 315,418 |
|
$ 370,609 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GROSS MARGIN |
|
|
|
|
|
|
|
|
|
|
|
|
Equipment rentals |
|
|
|
|
|
|
|
|
|
|
|
|
Rentals |
49.0% |
|
- |
|
49.0% |
|
- |
|
49.0% |
|
49.6% |
|
Rentals other |
- |
|
-56.7% |
|
-56.7% |
|
77.3% |
|
2.3% |
|
2.8% |
|
|
49.0% |
|
-56.7% |
|
43.0% |
|
77.3% |
|
44.4% |
|
45.1% |
|
New equipment sales |
11.3% |
|
- |
|
11.3% |
|
- |
|
11.3% |
|
11.9% |
|
Used equipment sales |
32.2% |
|
- |
|
32.2% |
|
- |
|
32.2% |
|
34.2% |
|
Parts sales |
27.0% |
|
- |
|
27.0% |
|
- |
|
27.0% |
|
26.7% |
|
Services revenues |
65.9% |
|
- |
|
65.9% |
|
- |
|
65.9% |
|
67.7% |
|
Other |
0.4% |
|
56.7% |
|
51.4% |
|
-77.3% |
|
-9.5% |
|
-15.2% |
|
Total gross margin |
35.3% |
|
- |
|
35.3% |
|
- |
|
35.3% |
|
37.1% |
|
(1) |
(a) We have recast the prior year period information to conform to the current year presentation of hauling fees and related cost of revenues included within Equipment Rentals rather than included within Other Revenues as previously reported. |
(b) Upon our adoption of the new lease accounting guidance (ASC 842), certain ancillary fees associated with our equipment rental activities, such as damage waiver income, environmental fees and fuel and other recovery fees, are properly included within our Rental Revenue segment rather than Other Revenues as previously reported. Because we elected to not recast prior periods upon ASC 842 adoption, the table above recasts these amounts on an “As Adjusted” basis to conform to the current year presentation.
|
(2) |
Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of income in this press release as a single line item, “Equipment Rentals”. The above table disaggregates our equipment rental revenues for discussion and analysis purposes only. |
- END -