16.05.2009

Ahern drops 25%

Ahern Rentals, the Las Vegas based access and telehandler rental company has reported total first quarter revenues of $70.6 million, almost 25 percent down on the same period last year.

Equipment rentals declined 19 percent to $63.2 million, although same store rental revenues were down 23 percent. The company has opened 10 new branches since the March 2008 and continues to expand its network.

In April this year it opened locations in Raleigh, North Carolina - Atlanta, Georgia and Lubbock – Texas. Dollar utilisation decreased to 31 percent from 42% in 2008, due to a 14 percent fall in average rental rates, combined a drop in physical utilisation from 67 to 56 percent.

Sales of used equipment dropped 54 percent to $2 million, while sales of new equipment was down 49 percent to $5.4 million, although the 2008 number included a $4.9 million sell of stock in March 2008 at a small loss. Outside of this new equipment sales were down by just four percent.

The company reported a pre-tax loss for the quarter of $13.5 million, compared to a $2.4 million profit at the end of the first quarter 2008. Capital expenditure on new rental equipment was $5.5 million, compared to $36.5 million last year.

Vertikal Comment

Ahern continues to expand through the recession, although given the company’s high debt level and leverage, together with the sharp deterioration in demand, it may well have to slow its network expansion to ensure that it is in step with the market pick up.

If it can maintain its improved cash flows and hold its current revenue levels it could come out of the recession better than the other large rental companies. Don Ahern has a track record of good timing, hopefully this will stand him in good stead this time round.