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Essex Rental Corp. Reports Third Quarter 2012 Results

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

Third Quarter 2012 Highlights

  • Equipment rental revenue was $12.6 million for the three months ended September 30, 2012, a 17.6% increase from $10.7 million for the three months ended September 30, 2011 and a 13.1% increase from $11.1 million for the three months ended June 30, 2012;
  • Total gross profit was $6.4 million for the three months ended September 30, 2012, a 76.8% increase from $3.6 million for the three months ended September 30, 2011 and a 19.4% increase from $5.3 million for the three months ended June 30, 2012;
  • Adjusted EBITDA before non-cash compensation and non-recurring expenses for the three months ended September 30, 2012 increased to $5.2 million as compared to $3.0 million and $4.3 million for the three month periods ended September 30, 2011 and June 30, 2012, respectively;
  • Average monthly crawler crane rental rate was $17,560 for the three months ended September 30, 2012; an increase of $1,692 or 10.7% compared to $15,868 for the three months ended September 30, 2011. On a sequential quarterly basis, average monthly crawler crane rental rate increased by $519 or 3.0% compared to $17,041 for the three month period ended June 30, 2012. Average monthly crawler crane rental rate for the three months ended September 30, 2012 was at its highest level since the first quarter of 2010;
  • Crawler crane utilization increased to 43.4% for the three months ended September 30, 2012, compared to 39.5% for the three months ended September 30, 2011 and 39.4% for the three months ended June 30, 2012;
  • Rough terrain crane utilization increased to 69.3% for the three months ended September 30, 2012, compared to 63.2% for the three months ended September 30, 2011 and 67.6% for the three months ended June 30, 2012. This marks the highest utilization rate achieved in this asset class since our acquisition of this category of assets in late 2010;
  • Heavy tower crane and elevator lift utilization increased to 54.7% for the three months ended September 30, 2012 compared to 37.5% for the three months ended September 30, 2011. The current quarter utilization rate was a marginal decline compared to the record high 55.1% achieved in the prior quarter;
  • Boom truck utilization increased to 61.9% for the three months ended September 30, 2012, compared to 60.3% for the three months ended September 30, 2011 and 43.1% for the three months ended June 30, 2012. This marks the highest utilization rate achieved in this asset class since our acquisition of this category of assets in late 2010;
  • Equipment rental segment gross profit increased 130.1% to $5.1 million for the three month period ended September 30, 2012 compared to $2.2 million for the comparable period in 2011. On a sequential quarterly basis, equipment rental segment gross profit increased 27.8% from $4.0 million for the three months ended June 30, 2012;
  • Parts & service segment gross profit increased 69.6% to $1.3 million for the three month period ended September 30, 2012 compared to $0.7 million for the comparable period in 2011;
  • Total debt has decreased by $10.2 million since December 31, 2011, due in part to the disposition of excess rental equipment at an average of 109.2% of Orderly Liquidation Value (“OLV”).

CEO Comments

Ron Schad, President and CEO of Essex stated, “Improvements in equipment utilization, better rental pricing and the operating initiatives that we have initiated throughout 2012 are contributing to the improvement in our operating results. We believe that these results validate our decision in late 2010 to broaden our equipment portfolio to include rough terrain cranes, boom trucks and tower cranes as well as to add predictable business lines such as third party aftermarket parts and service sales. Approximately 67% of the year over year improvement in our earnings is attributable to higher utilization and rental rates, while the remainder is attributable to the operating improvements that have been implemented throughout the year.

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