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October 2018
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Herc Rentals reports double digit gains in 2nd quarter

Herc Holdings posted $392.5 million in equipment rental revenue in the second quarter compared to $350.8 million for the second quarter last year, an 11.9-percent year-over-year increase. Herc’s total revenue for the quarter was $485.5 million, compared to $415.8 million in the year-ago quarter, a 16.8-percent leap.

The company’s net results improved from a net loss of $27.6 million a year ago to a net loss of $0.3 million.

Average fleet at original equipment cost increased 5.7 percent and overall pricing jumped 2.9 percent in the second quarter compared to the year-ago period. It was the ninth consecutive quarter of year-over-year rental rate improvement.

Adjusted EBITDA increased 14.4 percent to $152.2 million in the quarter compared to $133.1 million in Q217.

Dollar utilization of 35.4 percent in the second quarter of 2018 was a 140-basis-point hike compared to the second quarter of 2017.

“Our focus on fleet, customer and local market diversification continued to drive strong organic rental revenue growth across North America in the second quarter,” said Larry Silber, president and CEO. “We delivered our fourth consecutive quarter of double-digit growth in equipment rental revenue over the prior-year period, benefiting from improved volume, mix and price.

“We also completed the final separation of our financial information technology systems from Hertz at the end of July. The successful completion of this project means we no longer use any support services from our former parent and establishes our independence. With the final separation now behind us, our full attention and resources can be applied to operational improvement.”

For the first six months of 2018, equipment rental revenue increased 13.4 percent to $761.6 million, compared to $671.4 million a year ago. The double-digit growth reflected strong growth in rental revenue from local accounts, and ProSolutions and ProContractor categories.

Total revenue increased 13.9 percent to $916.8 million for the first half, compared to $805.1 million in 2017. $111.6 million year-over-year hike was helped by an increase of sales of used equipment of $24.7 million, benefiting from a strong used equipment market as the company focused on improving equipment mix and reducing fleet age.

Pricing increased 2.8 percent in the first half of 2018 compared to the year-ago half.

Adjusted EBITDA in the first half of 2018 was $284.9 million compared to $230.9 million in the first half of 2017, a 23.4-percent uptick, primarily because of strong rental revenue growth and improved pricing in the used equipment market.

Herc reported net fleet capital expenditures of $170.4 million for the first half of 2018. Gross fleet capital expenditures were $300.5 million, and disposals were $130.1 million.

Average fleet age was about 46 months as of June 30, 2018, compared to approximately 48 months a year ago.
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