H&E Equipment Services posted total first quarter revenue of $260.5 million compared to $226.8 million in the first quarter in 2017, a 14.8-percent year-over-year increase. Included in the total revenue was $11.7 million from the former CEC business in Colorado, acquired by H&E on Jan. 1, 2018.
Rental revenue was $129.4 million in the first quarter compared to $107.3 million a year ago, a 20.5-percent hike. Average rental rates increased 2.1 percent compared to the year-ago quarter and 0.2 percent compared to the fourth quarter of 2017.
Net income was $9.5 million in the first quarter compared to net income of $5.4 million a year ago. The effective income tax rate was 27.5 percent in the first quarter of 2018 and 36.8 percent in the first quarter of 2017.
Adjusted EBITDA increased 17.7 percent to $80.9 million in the first quarter compared to $68.8 million a year ago, yielding a margin of 31.1 percent of revenues compared to 30.3 percent a year ago. CEC contributed EBITDA of $7.7 million with a margin of 66.5 percent.
New equipment sales increased 35.7 percent to $46.5 in the first quarter compared to $34.3 million a year ago, while used equipment sales declined 13.9 percent to $24.9 million in the first quarter compared to $28.9 million a year ago.
Rental gross margins were 47.6 percent in the first quarter of 2018, compared to 44.8 percent a year ago. Average time utilization based on original equipment cost was 70.4 percent compared to 68.5 percent a year ago.
Dollar utilization was 34.7 percent in the first quarter compared to 32.4 percent a year ago. Average rental fleet age on March 31, 2018, was 34.9 months compared to an industry average age fleet of 44.8 months, H&E said.
H&E finalized its acquisition of Rental Inc., with branches in Alabama and Florida, increasing its branch count to 88.
“The momentum in our rental business continued during the first quarter with revenues increasing 20.5 percent and margins increasing 280 basis points to 47.6 percent compared to the first quarter of last year,” said John Engquist, H&E Equipment Services CEO. “Physical utilization remained above year-ago levels, increasing to 70.4 percent compared to 68.5 percent, while rates increased 2.1 percent. The strong demand in our non-residential markets resulted in growth in the size of our rental fleet.
“We are excited about 2018 for our business and industry. Demand in the non-residential construction markets we serve is above year-ago levels and broad-based throughout our geographic footprint. In addition to solid general project activity, energy-related work in our Gulf
Coast region is strong, benefiting both our rental and distribution businesses. With our recent acquisitions of CEC and Rental Inc., we have added eight branches so far this year. Rapidly executing on our stated growth strategy is a high priority and we are contributing to explore additional acquisitions and market expansion through Greenfields and warm starts.”
H&E Equipment Services is based in Baton Rouge, La.