H&E Equipment Services Reports Third Quarter 2012 Results

Forward-Looking Statements

Certain statements in this press release are “forward-looking statements” within the meaning of the federal securities laws. Statements that are not historical facts, including statements about our beliefs and expectations are forward-looking statements. Statements containing the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) general economic conditions and construction and industrial activity in the markets where we operate in North America as well as the depth and duration of the macroeconomic downturn related to decreases in construction and industrial activities, and the impact of conditions of the global credit markets and their effect on construction spending activity and the economy in general; (2) relationships with equipment suppliers; (3) increased maintenance and repair costs as we age our fleet and decreases in our equipments’ residual value; (4) our indebtedness; (5) the risks associated with the expansion of our business; (6) our possible inability to effectively integrate any businesses we acquire; (7) competitive pressures; (8) compliance with laws and regulations, including those relating to environmental matters and corporate governance matters; and (9) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release.

H&E EQUIPMENT SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(Amounts in thousands, except per share amounts)
			Three Months Ended										Nine Months Ended
			September 30,										September 30,
			2012					2011					2012					2011
Revenues:
Equipment rentals			$	77,808				$	61,190				$	207,941				$	165,440
New equipment sales				49,009					46,543					154,710					133,629
Used equipment sales				24,990					27,172					75,100					65,655
Parts sales				26,058					24,647					74,161					71,166
Service revenues				14,436					14,191					41,615					40,072
Other				12,208					10,546					33,671					27,570
Total revenues				204,509					184,289					587,198					503,532
Cost of revenues:
Rental depreciation				27,150					22,076					74,727					64,146
Rental expense				12,579					12,176					36,375					34,484
New equipment sales				43,367					41,123					136,945					118,271
Used equipment sales				18,399					20,824					53,426					50,444
Parts sales				19,092					18,073					53,826					52,174
Service revenues				5,615					5,451					15,907					15,499
Other				11,384					10,825					32,183					31,862
Total cost of revenues				137,586					130,548					403,389					366,880
Gross profit				66,923					53,741					183,809					136,652
Selling, general, and administrative expenses				42,402					39,042					124,504					114,681
Gain on sales of property and equipment, net				514					372					1,478					521
Income from operations				25,035					15,071					60,783					22,492
Loss on early extinguishment of debt				(10,180	)				-					(10,180	)				-
Interest expense				(9,825	)				(7,222	)				(23,668	)				(21,607	)
Other income, net				243					118					751					626
Income before provision for income taxes				5,273					7,967					27,686					1,511
Provision for income taxes				1,564					3,119					9,554					447
Net income			$	3,709				$	4,848				$	18,132				$	1,064
NET INCOME PER SHARE
Basic – Net income per share			$	0.11				$	0.14				$	0.52				$	0.03
Basic – Weighted average number of common shares outstanding				34,958					34,804					34,867					34,743
Diluted – Net income per share			$	0.11				$	0.14				$	0.52				$	0.03
Diluted – Weighted average number of common shares outstanding				34,974					34,860					34,963					34,884

H&E EQUIPMENT SERVICES, INC.
SELECTED BALANCE SHEET DATA (unaudited)
(Amounts in thousands)
											September 30,				December 31,
											2012				2011
Cash											$	3,250			$	24,215
Rental equipment, net												571,936				450,877
Total assets												940,226				753,305
Total debt (1)												663,212				268,660
Total liabilities												902,933				489,098
Stockholders’ equity												37,293				264,207
Total liabilities and stockholders’ equity											$	940,226			$	753,305
(1) Total debt consists of the aggregate amounts outstanding on the senior secured credit facility, senior unsecured notes and capital lease obligations.
H&E EQUIPMENT SERVICES, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Amounts in thousands)
			Three Months Ended								Nine Months Ended
			September 30,								September 30,
			2012				2011				2012				2011
Net income			$	3,709			$	4,848			$	18,132			$	1,064
Interest expense				9,825				7,222				23,668				21,607
Provision for income taxes				1,564				3,119				9,554				447
Depreciation				30,609				25,139				84,724				73,456
Amortization of intangibles				16				90				66				337
EBITDA			$	45,723			$	40,418			$	136,144			$	96,911
Loss on early extinguishment of debt				10,180				-				10,180				-
Adjusted EBITDA			$	55,903			$	40,418			$	146,324			$	96,911

H&E EQUIPMENT SERVICES, INC.
UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Amounts in thousands, except per share amounts)
			Three Months Ended September 30, 2012
			As Reported				Adjustment (1)				Adjusted
Income before provision for income taxes			$	5,273			$	10,180			$	15,453
Provision for income taxes				1,564				3,019				4,583
Net income			$	3,709			$	7,161			$	10,870
NET INCOME PER SHARE
Basic – Net income per share			$	0.11							$	0.31
Diluted – Net income per share			$	0.11							$	0.31
Weighted average number of common shares outstanding
Basic				34,958								34,958
Diluted				34,974								34,974
			Nine Months Ended September 30, 2012
			As Reported				Adjustment (1)				Adjusted
Income before provision for income taxes			$	27,686			$	10,180			$	37,866
Provision for income taxes				9,554				3,512				13,066
Net income			$	18,132			$	6,668			$	24,800
NET INCOME PER SHARE
Basic – Net income per share			$	0.52							$	0.71
Diluted – Net income per share			$	0.52							$	0.71
Weighted average number of common shares outstanding
Basic				34,867								34,867
Diluted				34,963								34,963
(1) Adjustment includes premium paid to repurchase or redeem the Company’s 8 3/8% senior unsecured notes and the write-off of unamortized deferred transaction costs.

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