As it returns to normal commerce, Ahern Rentals Inc. expects an improving economy and its restructuring strategy to yield a run of several strong years.
Projections built into its Chapter 11 bankruptcy reorganization plan, approved by a judge on Wednesday, show revenues rising 31.6 percent over the next four years and profits jumping 136 percent. This would not only be enough to cover daily operations but the new loans Ahern took out to repay everyone in full.
While the company has experienced growth spurts in the past, propelled by contractors renting or buying its heavy construction equipment, one component will change markedly — the reliance on hometown Las Vegas. As recently as 2006, the company drew 35 percent of its revenues from the valley, according to company documents, but that had shrunk to 14 percent last year with no signs of rebounding significantly in the future.
But as major clients such as CityCenter were complete and with little new work to replace them, Ahern nearly doubled its branch network to 75 and established itself in 22 states as far away as New Jersey. This not only discovered paying customers for equipment that was gathering dust in Las Vegas, but diversified the sales base away from the long-standing reliance on the Southwest, including Southern California and Arizona.
At the same time, the company laid off 125 people, slimmed its inventory by 2,400 pieces to the current 36,900 and hung on to them longer before selling them used.