Strongco Reports First-Quarter Rental Revenues Up 29%

Total revenues in the three months ended March 31, 2013 were $97.5 million, up 0.7% from the first quarter of 2012. Equipment sales decreased by 2% from last year to $60.6 million; rental revenues were $6.7 million, up 29% from $5.2 million; and product support revenues totalled $30.2 million compared to $29.6 million from the same period in the prior year.

Document: Strongco's First-Quarter Earnings Report

“Our markets took a marked pause in the first quarter of 2013, most significantly, losing momentum in the month of March which saw customers postpone deliveries and delay conversions on Rental Purchase Options,” said Robert Dryburgh, president and chief executive officer. “Compared to the same quarter last year, our overall market declined, particularly in Alberta and Quebec. However, with help from an improved market presence through new branches, Strongco’s revenues were relatively steady in comparison to the first quarter of 2012.

"While our cost base has increased from last year, the major factor affecting expenses in the quarter were a combination of under-absorption of labour and ancillary costs, and a much lower level of warranty activity. Both of these were adversely affected by weather and economic conditions which curtailed machine use and, consequently, the utilization of our field crews.”

He continues, “We remain focused on reducing our level of equipment inventory which has resulted in higher debt and interest costs. In conjunction with customer demand and the seasonality of our business we are controlling incoming orders and placing an internal focus on selling older products.”