H&E Equipment Services, Inc. (NASDAQ: HEES) today announced results for the third quarter ended September 30, 2013.
THIRD QUARTER 2013 HIGHLIGHTS:
- Revenues increased 32.2% to $270.4 million versus $204.5 million a year ago.
- Net income was $14.0 million in the third quarter compared to $3.7 million a year ago. Net Income increased $3.1 million to $14.0 million compared to adjusted net income of $10.9 million a year ago.
- Adjusted EBITDA increased 25.2% to $70.0 million from $55.9 million, yielding a margin of 25.9% of revenues compared to 27.3% a year ago. Margins were impacted by revenue mix with a significant increase in new equipment sales compared to a year ago.
- Rental revenues increased 14.9%, or $11.6 million, to $89.4 million due to improved rates, a larger fleet compared to a year ago and strong demand.
- New equipment sales increased 84.1%, or $41.2 million, to $90.2 million, largely due to higher crane and earthmoving sales.
- Gross margin was 29.7% as compared to 32.7% a year ago. Rental gross margin increased to 49.6% compared to 48.9% a year ago.
- Average time utilization (based on original equipment cost) was 72.3% compared to 72.9% a year ago and 71.0% in the second quarter of 2013. Average time utilization (based on units available for rent) was 66.6% compared to 68.9% last year and 66.3% last quarter.
- Average rental rates increased 5.2% compared to a year ago and improved 0.7% compared to the second quarter of this year.
- Dollar utilization was consistent with the prior year at 36.7%.
- Average rental fleet age at September 30, 2013 was 35.0 months, down from 35.9 months at the end of the last quarter and younger than the industry average age of 45 months.
John Engquist, H&E Equipment Services’ chief executive officer, said, “Our business performed exceptionally well during the third quarter as a result of our continued focus on solid execution, capitalizing on market cycle expansion and strong industrial market penetration. Total revenues increased significantly, up 32.2% from a year ago, primarily due to ongoing strength in our rental and new equipment businesses. Rental revenues grew 14.9% on rates that were 5.2% higher than a year ago and on a significantly larger fleet than a year ago. New and used equipment sales increased 84.1% and 47.2%, respectively, which we believe affirms a healthier economy and general construction market.”