In its first-quarter financial report, United Rentals Inc. announced rental revenue increased 9.7% year-over-year and adjusted EBITDA increased 44.1%, or $68 million, to $519 million. The company has reaffirmed its outlook for full-year adjusted EBITDA in a range of $2.55 billion to $2.65 billion, and it currently expects to be near the top of that range.?
Within rental revenue, owned equipment rental revenue increased 9.1%, reflecting year-over-year increases of 7.6% in the volume of equipment on rent and 4.3% in rental rates. The company has reaffirmed its outlook for a full-year increase in rental rates of approximately 4%, and full-year total revenue in a range of $5.45 billion to $5.65 billion.
Total revenue was $1.178 billion and rental revenue was $1.005 billion, compared with $1.100 billion and $916 million, respectively, for the same period last year.
Time utilization increased 40 basis points year-over-year to 64.6%. The company has reaffirmed its outlook for full-year time utilization of approximately 68.5%.
The company generated $110 million of proceeds from used equipment sales at an adjusted gross margin of 49.1%, compared with $123 million and 43.9% for the same period last year.
"We're off to a strong start in 2014, with notable year-over-year growth in rates, time utilization and volume," said Michael Kneeland, chief executive officer of United Rentals. "Our adjusted EBITDA margin improved to over 44%, a first quarter record. Despite the headwind of a harsh winter, we strategically managed our business to capitalize on pockets of opportunity. We now see solid demand in almost every market, giving us further confidence in our full year outlook."
He continued, "The feeling in the field is upbeat -- our customers and managers are bullish about business prospects, including the long-awaited recovery in commercial construction. We plan to leverage our scale in this environment and bring in about $750 million of fleet in the second quarter. The integration of our National Pump acquisition is going well, and we've opened three new specialty branches in trench safety, power and HVAC. These are just a few of the many growth initiatives that will drive our short and long-term performance.
National Pump Acquisition
In March 2014, the company announced that it planned to acquire certain assets of National Pump, the second largest specialty pump rental company in North America. The acquisition closed on April 1, 2014. The total OEC of the acquired fleet was approximately $215 million, and National Pump had historical annual revenue of approximately $210 million. The purchase price was approximately $780 million, comprised of $765 million in cash and $15 million in stock. The transaction also provides for up to $125 million in additional cash consideration to be paid based on the future achievement of certain adjusted EBITDA targets.
