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Essex Rental Corp. Reports Second Quarter 2012 Results

Stocks in this article: ESSX

Essex Rental Corp. (Nasdaq: ESSX) ("Essex") today announced its unaudited consolidated results for the three months ended June 30, 2012.

Second Quarter 2012 Highlights

  • Total revenue was $27.2 million for the three months ended June 30, 2012, a 21.7% increase from $22.3 million for the three months ended June 30, 2011;
  • EBITDA before non-cash compensation and non-recurring expenses for the three months ended June 30, 2012 increased to $4.3 million as compared to $1.8 million and $2.6 million for the three month periods ended June 30, 2011 and March 31, 2012, respectively;
  • Average monthly crawler crane rental rates increased by $808 or 5.0% to $17,041 on a sequential quarterly basis, compared to $16,233 for the three month period ended March 31, 2012. On a year over year basis, average monthly crawler crane rental rate increased $1,694 or 11.0% from $15,347 for the three months ended June 30, 2011. Average monthly crawler crane rental rates are at their highest level since the first quarter of 2010;
  • Excluding the impact of the levee project that was active in 2011, utilization of crawler cranes increased to 39.4% in the second quarter of 2012, compared to 34.8% for the comparable quarter in 2011;
  • Utilization of rough terrain cranes increased to 67.6% in the second quarter of 2012, compared to 54.8% for the first quarter of 2012;
  • Utilization of heavy tower cranes and elevator lifts increased to 55.1% in the second quarter of 2012, compared to 47.9% for the first quarter of 2012;
  • New, used and rental equipment sales totaled $8.6 million for the three month period ended June 30, 2012, a 61.4% increase from $5.3 million for the three month period ended June 30, 2011; and
  • Total debt decreased by $7.9 million over the six months ended June 30, 2012, due in part to the disposition of excess rental equipment at an average of 108.2% of Orderly Liquidation Value (“OLV”).

CEO Comments

Ron Schad, President and CEO of Essex stated, “We are satisfied with the results achieved during the second quarter of 2012 and believe that the results represent a validation of our decision to broaden our equipment portfolio to include rough terrain cranes, boom trucks and tower cranes as well as add predictable business lines such as third party aftermarket parts and service sales. Much of the increase in earnings on both a sequential quarter and year over year basis is as a result of operating improvements that have been implemented over the last six months. Utilization in equipment categories that represent the majority of our OLV continues to improve gradually, albeit off a low base. Specifically, in the second quarter of 2012 we experienced sequential quarterly increases in utilization for crawler cranes, rough terrain cranes and large tower cranes, which are our three largest equipment types as measured by original equipment cost. Rental rates are trending higher across many of our primary equipment categories. We were pleased with the level of rental fleet asset sales, particularly of non-core assets including aerial work platforms and forklifts that were acquired as part of the Coast acquisition. Proceeds from these sales were used to reduce debt.”

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