07.05.2009

RSC drops 17%

RSC, one of the largest equipment rental companies in the USA has reported first quarter revenues down 16.8 percent to $287.5 million.

Rental revenue dropped 22.8 percent with new equipment sales also dropping, while sales of new equipment and consumables dropped 24 percent. Sales of used equipment bucked the trend and grew by 58 percent to $49.9 million.

The company posted a pre-tax loss of $21.2 million, compared to a profit of $36.6 million for the same period last year. The major contributor to the loss was the lower rental volumes, while SG&A costs remained static and the fact that used equipment sales generated virtually no margin, due the company says to selling most of the equipment through low margin auction channels in order to pay down its revolving credit line.

The company closed or consolidated 14 locations in the first quarter incurring charges of around $8 million.