04.03.2012

H&E leaps back into profit

Louisiana based crane & access sales and rental company H&E Equipment has posted a strong set of numbers in the fourth quarter with strong profit growth for the year.

Full year revenues were $720.6 million just over 25 percent up on the 2010, of this rental revenues were $228 million a rise of just over 28 percent, while sales of new equipment were $220.2 million an increase of almost 32 percent. Other revenues include, parts, service and used equipment. Pre-tax profits were $12.1 million compared to a loss in 2010 of $40.4 million.

The strong growth trend continued into the fourth quarter with total revenues up 24 percent to $217 million, of which rentals were $62.6 million up 21 percent on the same period last year, while new equipment sales were up over 36 percent to $86.6 million. Pre-tax profits for the period were $10.6 million compare to a loss in the same quarter of 2010 of $4 million.

Rental utilisation increased from 62.7 percent in the fourth quarter 2010 to 67.4 percent this year. Rental rates over the year improved 6.5 percent, while the average age of the rental fleet at year end was 43.3 months compared to a claimed industry average of 51 months.

Chief executive John Engquist said: “The fourth quarter was exceptionally strong for our business. Our exposure to the industrial sector continues to be very beneficial for our company. Activity related to the oil and gas industries, where we are heavily embedded, greatly increased. Commercial construction activity also showed a modest improvement during the quarter and customers demonstrated improved confidence in the recovery by making meaningful capital purchases.”

“Our distribution business, particularly new equipment sales, far exceeded our expectations for the quarter. As a result of these improvements in market conditions and solid execution by our employees, we delivered an impressive increase in revenues and a 61.3 percent increase in EBITDA. Net income grew to $7.9 million compared to a net loss of $2.5 million on a year-over-year basis. Every segment of our business generated solid increases in revenue and gross profit.”

“I am very pleased with our tremendous finish to 2011 and the momentum our business is carrying into 2012. We expect another solid year for our company based on the current trends. As demonstrated by our performance last year, we are well positioned to benefit from continued improvements in market conditions.”

Vertikal Comment

An excellent set of results no matter how you look at them, the surprise is the strong bounce back in new equipment sales in the fourth quarter which suggests that contractors and smaller rental companies who buy cranes, aerial lifts and earthmoving equipment from H&E are feeling very confident about the future.