United Rentals Inc.

United Rentals Returns to Profit, Reports 5% Rental Revenue Increase in Second Quarter

In its second-quarter financial report, United Rentals Inc. noted rental revenue increased 4.7% for the period ending June 30, 2013. Within rental revenue, owned equipment rental revenue increased 6.2%, reflecting year-over-year increases of 5.1% in the volume of equipment on rent and 4.2% in rental rates.

Document: United Rentals Second-Quarter Financials

Total revenue was $1.206 billion and rental revenue was $1.009 billion. On a GAAP basis, the company reported net income of $83 million, or $0.78 per diluted share. Adjusted EPS for the quarter was $1.12 per diluted share.

Other highlights include:

  • Adjusted EBITDA was $549 million and adjusted EBITDA margin was 45.5%, an increase of $76 million and 370 basis points, respectively, from the same period last year. The company has reaffirmed its outlook for full year adjusted EBITDA in a range of $2.25 billion to $2.35 billion.
  • Time utilization increased 60 basis points year-over-year to a second quarter company record 67.9%. The company has reaffirmed its outlook for full year time utilization of approximately 68.0%.
  • The company generated $131 million of proceeds from used equipment sales at an adjusted gross margin of 42.0%, compared with $96 million of proceeds at an adjusted gross margin of 40.6% for the same period last year. 4
  • The company realized cost synergies of $60 million in the quarter from the integration of RSC, and reaffirmed its goal of $230 million to $250 million of annual cost synergies on a fully developed basis.
  • Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was 102.7%.

"Our strong second quarter performance reflects our commitment to a strategy of profitable and disciplined growth," said Michael Kneeland, chief executive officer. “We invested over $730 million in fleet purchases in the second quarter to fill customer orders, especially key accounts, and prepare for peak season demand. We feel comfortable about achieving our full-year outlook on rate, total revenue, EBITDA and free cash flow, while continuing to reduce our leverage.”

Six Months 2013 Results

On a pro-forma basis (that is, assuming the combination of United Rentals results and RSC results for the entire six months ended June 30, 2012), the company reported the following:

  • Total revenue was $2.306 billion and rental revenue was $1.925 billion, compared with $2.196 billion and $1.833 billion, respectively, for the same period last year.
  • Rental revenue increased 5.0%. Within rental revenue, owned equipment rental revenue increased 6.7%, reflecting year-over-year increases of 5.4% in the volume of equipment on rent and 4.8% in rental rates.
  • Adjusted EBITDA was $1.000 billion and adjusted EBITDA margin was 43.4%, an increase of $135 million and 400 basis points, respectively, from the same period last year.
  • Time utilization increased 50 basis points year-over-year to 66.1%. The company generated $254 million of proceeds from used equipment sales at an adjusted gross margin of 42.9%, compared with $221 million of proceeds at an adjusted gross margin of 39.8% for the same period last year.
  • Flow-through was 122.7%.

 

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