In its 2015 first-quarter financial report, United Rentals Inc. announced rental revenue (which includes owned equipment rental revenue, re-rent revenue and ancillary items) increased 11.9% year-over-year. Within rental revenue, owned equipment rental revenue increased 12.0%, reflecting year-over-year increases of 8.1% in the volume of equipment on rent and 2.9% in rental rates. Excluding the impact of the National Pump acquisition, rental revenue increased 7.3% year-over-year.
Total revenue was $1.315 billion and rental revenue was $1.125 billion, compared with $1.178 billion and $1.005 billion, respectively, for the same period last year1. On a GAAP basis, the company reported first quarter net income of $115 million, or $1.16 per diluted share, compared with $60 million, or $0.56 per diluted share, for the same period last year2.
Adjusted EPS3 for the quarter was $1.34 per diluted share, compared with $0.90 per diluted share for the same period last year. Adjusted EBITDA4 was $602 million and adjusted EBITDA margin was a first quarter company record 45.8%, an increase of $83 million and 170 basis points, respectively, from the same period last year.
Michael Kneeland, chief executive officer of United Rentals, said, "We turned in a solid first quarter, with record revenue, EBITDA and ROIC. The year has had some early headwinds, including a decline in upstream oil and gas activity, a harsh winter, and the adverse currency impact of a strong U.S. dollar. We've offset these pressures by redistributing underutilized fleet to areas of higher demand. An improving rental landscape, and the strong performance of our power and trench specialty lines, helped drive our 12% increase in rental revenue."
Kneeland continued, "Looking to the rest of the year, we expect a continued rebound in construction activity, along with our usual seasonal uptick. We also expect secular penetration to continue. We're investing in our sales force, and we plan to open about 18 specialty rental branches this year. Our employees are excited to deliver a level of service that sets us apart in this environment."
First Quarter 2015 Highlights
- Return on invested capital was 9.0% for the 12 months ended March 31, 2015, an increase of 1.2 percentage points from the 12 months ended March 31, 2014.
- Time utilization decreased 40 basis points year-over-year to 64.2%. The locations from the National Pump acquisition experienced volume and pricing pressure associated with upstream oil and gas customers, which was a primary driver of the time utilization decrease. Excluding the impact of the National Pump acquisition, time utilization was 64.5%.
- The company generated $116 million of proceeds from used equipment sales at an adjusted gross margin of 50.9%, compared with $110 million and 49.1% for the same period last year.5
- Flow-through, which represents the year-over-year change in adjusted EBITDA divided by the year-over-year change in total revenue, was 60.6% for the quarter.