H&E Equipment Services Inc. announced results for the first quarter ended March 31, 2017.
FIRST QUARTER 2017 SUMMARY
- Revenues decreased 8.2% to $226.8 million versus $247.0 million a year ago.
- Net income was $5.4 million in the first quarter compared to net income of $5.6 million a year ago.
- EBITDA was $68.8 million in the first quarter compared to EBITDA of $69.1 million a year ago, yielding a higher margin of 30.3% of revenues compared to 28.0% a year ago.
- Rental revenues increased 4.4% to $107.3 million in the first quarter compared to $102.8 million a year ago.
- New equipment sales decreased 40.1% to $34.3 million in the first quarter compared to $57.2 milliona year ago.
- Used equipment sales increased 4.7% to $28.9 million in the first quarter compared to $27.6 million a year ago.
- Gross margin was 34.2% compared to 32.9% a year ago.
- Rental gross margins were 44.8% in the first quarter of 2017 compared to 45.3% a year ago.
- Average time utilization (based on original equipment cost) was 68.5% compared to 66.3% a year ago. Average time utilization (based on units available for rent) was 66.0% compared to 64.6% last year.
- Average rental rates decreased 0.5% compared to a year ago.
- Dollar utilization was 32.4% in the first quarter compared to 32.2% a year ago.
- Average rental fleet age at March 31, 2017, was 34.1 months compared to an industry average age of 41.9 months.
John Engquist, H&E Equipment Services’ chief executive officer, said, “The first quarter results along with the current trends in our business have reinforced our expectations for 2017. Our rental business performed well in the first quarter, with revenues increasing 4.4% from a year ago, margins holding solid at 44.8% and rates down only 0.5% year-over-year. As we anticipated, the ongoing challenges in the new equipment component of our distribution business persisted, due primarily to weak crane demand. We also expect our used equipment sales to trend down during the balance of this year as we intentionally sell less of our rental fleet as a result of higher anticipated rental demand in our non-residential construction markets.”
Engquist concluded, “We believe the opportunities that exist for our business in 2017 are encouraging as demand for rental equipment is increasing throughout the regions we serve. The environment in our Gulf Coast region remains positive as a result of several factors. Texas, our largest market, continues to experience a very healthy economy that is driving an array of non-residential projects. The energy markets are also improving as a result of increased shale drilling activity. In both Texas and Louisiana, a solid lineup of large industrial projects are either underway, at breaking ground stage, or scheduled for construction over the next few years.”
