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THIRD QUARTER 2013 HIGHLIGHTS:
-
Revenues increased 32.2% to
$270.4 million versus$204.5 million a year ago. -
Net income was
$14.0 million in the third quarter compared to$3.7 million a year ago. Net Income increased$3.1 million to $14.0 million compared to adjusted net income of$10.9 million a year ago. -
Adjusted EBITDA increased 25.2% to
$70.0 million from$55.9 million , yielding a margin of 25.9% of revenues compared to 27.3% a year ago. Margins were impacted by revenue mix with a significant increase in new equipment sales compared to a year ago. -
Rental revenues increased 14.9%, or
$11.6 million , to$89.4 million due to improved rates, a larger fleet compared to a year ago and strong demand. -
New equipment sales increased 84.1%, or
$41.2 million , to$90.2 million , largely due to higher crane and earthmoving sales. - Gross margin was 29.7% as compared to 32.7% a year ago. Rental gross margin increased to 49.6% compared to 48.9% a year ago.
- Average time utilization (based on original equipment cost) was 72.3% compared to 72.9% a year ago and 71.0% in the second quarter of 2013. Average time utilization (based on units available for rent) was 66.6% compared to 68.9% last year and 66.3% last quarter.
- Average rental rates increased 5.2% compared to a year ago and improved 0.7% compared to the second quarter of this year.
- Dollar utilization was consistent with the prior year at 36.7%.
-
Average rental fleet age at
September 30, 2013 was 35.0 months, down from 35.9 months at the end of the last quarter and younger than the industry average age of 45 months.
Engquist concluded, “We believe the positive trends that we are seeing in our business will continue through the balance of this year and into 2014, where we anticipate additional fleet growth and market expansion in our industrial markets, where we believe there will be continued high demand, and in the commercial construction sector, where we believe there will be expanding opportunities.”
FINANCIAL DISCUSSION FOR THIRD QUARTER 2013:
Revenue
Total revenues increased 32.2% to
Gross Profit
Gross profit increased 20.0% to
On a segment basis, third quarter 2013 gross margin on rentals was 49.6% in this quarter compared to 48.9% in the third quarter of 2012 due to higher average rental rates on new contracts in the period, strong fleet utilization and lower rental expenses as a percentage of equipment rental revenues. On average, rental rates increased 5.2% as compared to the third quarter of 2012. Time utilization (based on original equipment cost) was 72.3% in the third quarter of 2013 and 72.9% a year ago.
Gross margin on new equipment sales was 10.6% compared to 11.5% in the third quarter a year ago. Gross margin on used equipment sales was 26.3% compared to 26.4% a year ago. Gross margin on parts sales was 28.0% in this quarter and 26.7% a year ago. Gross margin on service revenues was 64.0% compared to 61.1% in the prior year.
Rental Fleet
At the end of the third quarter of 2013, the original acquisition cost
of the Company’s rental fleet was
Selling, General and Administrative Expenses
SG&A expenses for the third quarter of 2013 were
Income from Operations
Income from operations for the third quarter of 2013 was
Interest Expense
Interest expense for the third quarter of 2013 was
Net Income and Adjusted Net Income
Net income for the third quarter of 2013 was
EBITDA and Adjusted EBITDA
EBITDA for the third quarter of 2013 increased 53.0% to
Non-GAAP Financial Measures
This press release contains certain Non-GAAP measures (EBITDA, Adjusted EBITDA and Adjusted Net Income). Please refer to our Current Report on Form 8-K for a description of these measures and a discussion of our use of these measures. EBITDA, Adjusted EBITDA, and Adjusted Net Income as calculated by the Company, are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures are not measurements 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 results today,
The live broadcast of the Company’s quarterly conference call will be
available online at www.he-equipment.com
on
About
The Company is one of the largest integrated equipment services
companies in
Forward-Looking Statements
Certain statements in this press release 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” 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
H&E EQUIPMENT SERVICES, INC. |
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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 |
Nine Months Ended |
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September 30, |
September 30, |
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2013 |
2012 |
2013 |
2012 |
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Revenues: | |||||||||||||||||
Equipment rentals | $ | 89,420 | $ | 77,808 | $ | 248,518 | $ | 207,941 | |||||||||
New equipment sales | 90,220 | 49,009 | 216,979 | 154,710 | |||||||||||||
Used equipment sales | 36,779 | 24,990 | 103,589 | 75,100 | |||||||||||||
Parts sales | 26,571 | 26,058 | 77,971 | 74,161 | |||||||||||||
Service revenues | 13,729 | 14,436 | 42,050 | 41,615 | |||||||||||||
Other | 13,730 | 12,208 | 39,070 | 33,671 | |||||||||||||
Total revenues | 270,449 |
204,509 |
728,177 |
587,198 | |||||||||||||
Cost of revenues: | |||||||||||||||||
Rental depreciation | 31,527 | 27,150 | 89,679 | 74,727 | |||||||||||||
Rental expense | 13,550 | 12,579 | 41,401 | 36,375 | |||||||||||||
New equipment sales | 80,659 | 43,367 | 193,453 | 136,945 | |||||||||||||
Used equipment sales | 27,086 | 18,399 | 74,006 | 53,426 | |||||||||||||
Parts sales | 19,123 | 19,092 | 56,660 | 53,826 | |||||||||||||
Service revenues | 4,943 | 5,615 | 15,743 | 15,907 | |||||||||||||
Other | 13,261 | 11,384 | 37,043 | 32,183 | |||||||||||||
Total cost of revenues | 190,149 | 137,586 | 507,985 | 403,389 | |||||||||||||
Gross profit | 80,300 | 66,923 | 220,192 | 183,809 | |||||||||||||
Selling, general, and administrative expenses |
46,977 | 42,402 | 140,347 | 124,504 | |||||||||||||
Gain on sales of property and equipment, net |
609 | 514 | 1,715 | 1,478 | |||||||||||||
Income from operations | 33,932 | 25,035 | 81,560 | 60,783 | |||||||||||||
Loss on early extinguishment of debt | - | (10,180 | ) |
- |
|
(10,180 |
) |
|
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Interest expense | (13,193 | ) | (9,825 | ) | (38,550 | ) | (23,668 | ) | |||||||||
Other income, net | 237 | 243 | 945 | 751 | |||||||||||||
Income before provision for income taxes |
20,976 | 5,273 | 43,955 | 27,686 | |||||||||||||
Provision for income taxes | 7,023 | 1,564 | 14,416 | 9,554 | |||||||||||||
Net income | $ | 13,953 | $ | 3,709 | $ | 29,539 | $ | 18,132 | |||||||||
NET INCOME PER SHARE | |||||||||||||||||
Basic – Net income per share | $ | 0.40 |
$ |
0.11 |
$ |
0.84 |
$ |
0.52 |
|||||||||
Basic – Weighted average number of common shares outstanding |
35,099 | 34,958 | 35,022 | 34,867 | |||||||||||||
Diluted – Net income per share | $ | 0.40 | $ | 0.11 | $ | 0.84 | $ | 0.52 | |||||||||
Diluted – Weighted average number of common shares outstanding |
35,169 | 34,974 | 35,130 | 34,963 |
H&E EQUIPMENT SERVICES, INC. |
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SELECTED BALANCE SHEET DATA (unaudited) |
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(Amounts in thousands) |
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September 30, |
December 31, |
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2013 |
2012 |
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Cash | $ | 6,666 | $ | 8,894 | ||
Rental equipment, net | 672,057 | 583,349 | ||||
Total assets | 1,075,021 | 942,399 | ||||
Total debt (1) | 767,401 | 690,166 | ||||
Total liabilities | 995,239 | 893,763 | ||||
Stockholders’ equity | 79,782 | 48,636 | ||||
Total liabilities and stockholders’ equity | $ | 1,075,021 | $ | 942,399 | ||
(1) Total debt consists of the amounts outstanding on the senior secured credit facility, capital lease obligations and the aggregate amounts outstanding on the senior unsecured notes. |
H&E EQUIPMENT SERVICES, INC. |
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UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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(Amounts in thousands) |
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|
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Three Months Ended |
Nine Months Ended |
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2013 |
2012 |
2013 |
2012 |
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Net income | $ | 13,953 | $ | 3,709 | $ | 29,539 | $ | 18,132 | ||||
Interest expense | 13,193 | 9,825 | 38,550 | 23,668 | ||||||||
Provision for income taxes | 7,023 | 1,564 | 14,416 | 9,554 | ||||||||
Depreciation | 35,805 | 30,609 | 102,034 | 84,724 | ||||||||
Amortization of intangibles | - | 16 | - | 66 | ||||||||
EBITDA | $ | 69,974 | $ | 45,723 | $ | 184,539 | $ | 136,144 | ||||
Loss on early extinguishment of debt | - | 10,180 | - | 10,180 | ||||||||
Adjusted EBITDA | $ | 69,974 | $ |
55,903 |
$ |
184,539 | $ | 146,324 |
H&E EQUIPMENT SERVICES, INC. |
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UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES |
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(Amounts in thousands, except per share amounts) |
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Three Months Ended September 30, 2012 |
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As Reported |
Adjustment (1) |
Adjusted |
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|
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Income before provision for income taxes |
$ | 5,273 | $ | 10,180 | $ | 15,453 | |||||
Provision for income taxes | 1,564 |
3,019 |
4,583 |
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Net income | $ | 3,709 | $ | 7,161 | $ | 10,870 | |||||
NET INCOME PER SHARE | |||||||||||
Basic – Net income per share | $ | 0.11 | $ | 0.31 | |||||||
Diluted – Net income per share | $ | 0.11 | $ | 0.31 | |||||||
Weighted average number of common shares outstanding |
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Basic | 34,958 | 34,958 | |||||||||
Diluted | 34,974 | 34,974 | |||||||||
Nine Months Ended September 30, 2012 |
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As Reported |
Adjustment (1) |
Adjusted |
|||||||||
Income before provision for income taxes |
$ | 27,686 | $ | 10,180 | $ | 37,866 | |||||
Provision for income taxes | 9,554 | 3,512 | 13,066 | ||||||||
Net income | $ | 18,132 | $ | 6,668 | $ | 24,800 | |||||
NET INCOME PER SHARE | |||||||||||
Basic – Net income per share | $ | 0.52 | $ | 0.71 | |||||||
Diluted – Net income per share | $ | 0.52 | $ | 0.71 | |||||||
Weighted average number of common shares outstanding |
|||||||||||
Basic | 34,867 | 34,867 | |||||||||
Diluted | 34,963 | 34,963 | |||||||||
(1) Adjustment includes premium paid to repurchase or redeem the Company’s 8 3/8% senior unsecured notes and the write-off of unamortized deferred transaction costs in the prior three and nine month periods ended September 30, 2012. |
Source:
H&E Equipment Services, Inc.
Leslie S. Magee, 225-298-5261
Chief
Financial Officer
lmagee@he-equipment.com
or
Corporate
Communications, Inc. (CCI)
Kevin S. Inda, 941-792-1680
kevin.inda@cci-ir.com