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H&E Equipment Services increases revenue by 24 percent in 2011

H&E Equipment Services, Inc. recently announced operating results for the fourth quarter and year ending December 31, 2011.

  • Revenues increased 24.3 percent to $217.0 million versus $174.6 million a year ago. Revenues increased 17.8 percent from the third quarter of 2011.
  • Net income increased to $7.9 million in the fourth quarter compared to a net loss of $2.5 million a year ago.
  • EBITDA increased 61.3 percent to $43.4 million from $26.9 million a year ago, yielding a margin of 20.0 percent compared to 15.4 percent of revenues a year ago.
  • Rental revenues increased 21.4 percent, or $11.0 million, to $62.6 million on higher time utilization, better rates, and a larger fleet compared to a year ago.
  • New equipment sales increased to $86.6 million, reflecting a 36.7 percent increase from a year ago and an 86.0% increase from the third quarter. Increases in both comparative periods were driven by higher demand for new cranes.
  • Gross margins were 25.8 percent as compared to 23.9 percent a year ago.
  • Rental gross margins increased to 44.5 percent in the fourth quarter compared to 39.2 percent a year ago and 44.0 percent in the third quarter.
  • Average time utilization (based on original equipment cost) increased to 72.3 percent, compared to 67.0 percent a year ago and 71.8 percent in the third quarter. Average time utilization (based on units available for rent) increased to 67.3 percent compared to 62.7 percent last year and 68.9 percent in the third quarter.
  • Average rental rates increased 6.5 percent compared to a year ago.
  • Dollar utilization was 33.9 percent in the fourth quarter compared to 30.2 percent a year ago and 33.7 percent in the third quarter.
  • Rental fleet age at December 31, 2011 was 43.3 months compared to an industry average of approximately 51 months.

“The fourth quarter was exceptionally strong for our business. Our exposure to the industrial sector continues to be very beneficial for our Company,” said John Engquist, H&E Equipment Services’ president and chief executive officer. “Activity related to the oil and gas industries, where we are heavily embedded, greatly increased. Commercial construction activity also showed a modest improvement during the quarter and customers demonstrated improved confidence in the recovery by making meaningful capital purchases.

“Our distribution business, particularly new equipment sales, far exceeded our expectations for the quarter. As a result of these improvements in market conditions and solid execution by our employees, we delivered an impressive 24.3 percent increase in revenue growth and a 61.3 percent increase in EBITDA. Net income grew to $7.9 million compared to a net loss of $2.5 million on a year-over-year basis. Every segment of our business generated solid increases in revenue and gross profit.”

Engquist concluded, “I am very pleased with our tremendous finish to 2011 and the momentum our business is carrying into 2012. We expect another solid year for our Company based on the current trends. As demonstrated by our performance last year, we are well positioned to benefit from continued improvements in market conditions.”

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