Rental Revenues, Volume Up for RSC; Quarterly Loss Narrows

RSC Holdings posted first quarter results showing the company grew total revenue 25% over the first quarter 2010, including a 22% increase in rental revenue. Rental volume increased 20% year-over-year, for the fourth consecutive quarter of volume growth.

The company's net loss was $50 million, however, or 49 cents per diluted share, compared with a net loss of $38 million or 37 cents per diluted share for the same period last year. The first quarter net loss includes $49 million of pre-tax charges associated with RSC's refinancing activities in the quarter.

RSC posted $327 million in total revenue for the first quarter, compared with $261 million for the same period last year. The 22.5-percent jump in rental revenue took the company from $222 million in the first quarter last year to $272 million in the first quarter of 2011.

"We produced another quarter of exceptional volume growth of 20% and generated positive year-over-year pricing of 2.0%, including a 3.8% year-over-year improvement in March, " said Erik Olsson, president and CEO. "These results drove a 50% year-over-year increase in EBITDA and demonstrate the continued and increasing acceptance of our leading value proposition by both industrial and non-residential construction customers. Our strategy of making consistent investments in our footprint, people, technology and sales organization throughout the downturn has positioned us to outpace the growth of our end markets as we enter the expansion phase of the business cycle."

Adjusted EBITDA was $99 million for the quarter, a 50-percent increase over last year's $66 million. Adjusted EBITDA margin was 30.2 percent for the quarter, compared with 25.3 percent in 2010. The improved profitability and margins reflects increased volume and improved pricing.

Rental rates improved 2 percent for the quarter compared with the same period last year. Average fleet utilization was 64 percent, compared with 55 percent in 2010. The company invested $158 million in gross rental CapEx in response to growing demand. It sold $90 million of fleet at original equipment cost with margins of 27 percent, up from 9 percent in 2010. RSC generated 62 percent of its revenue from industrial customers.

"We see continued strengthening in the industrial markets and are benefiting from increasing customer focus on the total cost of rental and not strictly pricing," Olsson said. "Customers are embracing the value of our total rental solution approach including our Total Control system. In addition, improved results were widespread with all regions delivering double-digit revenue growth. As a result, we expect continued favorable year-over-year comparisons in the second quarter and remain optimistic that these positive trends will continue throughout the year."