05.03.2013

Profits more than triple at H&E

Louisiana based crane, access and equipment company has reported a strong increase in profits for 2012.

Total revenues for the year were $837.3 million, a 16.2 percent increase on 2011, while pre-tax profits were 3.6 time higher at $44.4 million.

Looking at the fourth quarter, revenues were up 15.3 percent to $250 million, while pre-tax profits increased almost 60 percent to $16.8 million. Revenues increased across the board with the strongest growth in used equipment sales and rental even though physical utilisation slipped to 71.8 percent, down half a percent on a year ago.

Chief executive John Engquist said: “The momentum in our business continued in the fourth quarter, where we delivered 15.3 percent revenue growth and impressive EBITDA growth of 39.2 percent. Demand for rental equipment continued at high levels and we successfully capitalised on the opportunity as rental revenues increased 28.9 percent compared to a year ago. While our rental business continued to benefit from the secular shift occurring, every segment of our business delivered year-over-year increases in revenue and gross profit. As a result, we delivered bottom line growth of 36.2 percent in the fourth quarter.”

“Our business performed well in 2012. As we move into 2013, we continue to invest in our fleet, expand our geographic footprint and strengthen our foothold in the industrial sector to leverage improving market opportunities. The extension in the bonus depreciation deduction should prove to be positive for our distribution business. Lastly, we recently completed a successful add-on notes offering of $100 million of seven percent senior unsecured notes due 2022, which priced at 108.5 percent of par. This notes offering enhances our liquidity profile and was leverage neutral, with the proceeds used to pay down a portion of the senior secured credit facility. From operations to capitalization, our Company is well positioned for continued growth in 2013.”

Vertikal Comment

A solid set of numbers from H&E with the only negativity being flat fourth quarter new equipment sales, more than offset by a surge in sales of used equipment, parts and service.

The company is in good shape to continue the recent progress and should have another good year in 2013, with similar revenue gains and profitability levels.