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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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