H&E Equipment Services, Inc. (NASDAQ: HEES) today announced results for the second quarter ended June 30, 2012.
SECOND QUARTER 2012 HIGHLIGHTS:
- Revenues increased 13.4% to $209.0 million versus $184.3 million a year ago.
- Net income increased to $10.5 million in the second quarter compared to net income of $2.7 million a year ago.
- EBITDA increased 46.8% to $51.7 million from $35.2 million, yielding a margin of 24.7% compared to 19.1% of revenues a year ago.
- Rental revenues increased 26.4%, or $14.7 million to $70.5 million on higher time utilization, better rates, and a larger fleet compared to a year ago.
- Gross margins were 30.7% as compared to 25.9% a year ago. Rental gross margins increased to 47.5% compared to 40.7% a year ago.
- Average time utilization (based on units available for rent) increased to 68.7% compared to 67.1% last year and 65.8% last quarter. Average time utilization (based on original equipment cost) increased to 73.5% compared to 70.0% a year ago and 69.5% in the first quarter of 2012.
- Achieved positive year-over-year and sequential rental pricing in the second quarter. Average rental rates increased 11.0% compared to a year ago and improved 5.0% from the first quarter of this year.
- Dollar utilization was 35.6% as compared to 31.0% a year ago.
- Average rental fleet age at June 30, 2012 was 40.4 months, down slightly from the end of the last quarter and significantly younger than the industry average age of 50 months.
John Engquist, H&E Equipment Services’ president and chief executive officer, said, “Our second quarter performance was very strong as we continued to experience solid demand in all of our end user markets, particularly in our Gulf Coast markets where energy-related activity remains very healthy. A modest recovery in commercial construction activity is also driving higher demand for rentals as the fundamentals for this segment of our business are very strong. We are approaching our prior record levels of time utilization and our strong dollar returns allow us to continue to increase our fleet size, which as of June 30 th, has surpassed our prior peak levels. Based on the strong demand and improved rental pricing, we plan to further expand our fleet through the remainder of this year. Rental rates improved 11.0% from a year ago and 5.0% from the first quarter. New equipment sales remain difficult to predict, but bidding activity for hydraulic cranes used in the energy sector is encouraging.”
“Our second quarter performance was again solid, and we are especially pleased with our bottom line improvement. While the overall economic environment is hard to predict, the trends in the markets we serve remain positive and the momentum in our business is continuing. We are opening two new locations in Texas to expand our presence and we continue to evaluate expansion opportunities in other markets as well.”