Revenues plunged 36.1 percent in the second quarter for H&E Equipment Services, dropping from $282.6 million in last year’s second quarter to $180.2 million in the recent quarter ended June 30. EBITDA decreased 46.5 percent to $34.6 million, a 19.2-percent margin, compared to $64.6 million, or a 22.9-percent margin in the year-ago quarter.
Equipment rental revenue dropped 33.4 percent from $75.2 million in last year’s second quarter to $50.1 million this year.
For the first six months of the year, rental revenue was $105.6 million, a 28-percent decrease from $146.4 million for the same period in 2008. Total revenue for the first half of the year was $366.4 million, compared with $528.4 million for the same period last year, a 30.6-percent slide.
“The recession continues to heavily impact our non-residential construction and industrial end markets,” said John Engquist, H&E Equipment Services president and CEO. “In spite of very weak demand for our products and services, we were able to remain profitable, increase liquidity and strengthen our balance sheet.”
Engquist was optimistic about overall economic conditions.
“While business conditions did not improve during the second quarter, we are encouraged by some positive signs that we are seeing in the economy,” he noted. “The banking system appears to have stabilized and credit markets have improved. We are also encouraged by signs of stabilization in the utilization of our rental fleet. I believe we have successfully scaled our business to the current environment and are well positioned to take advantage of the recovery when it begins.”
“As a result of our focus on cost containment and cash generation, we reduced our debt by $23 million during the second quarter,” added Leslie Magee, H&E’s chief financial officer. “As a result, our liquidity remains strong with $267 million of availability under our senior secured credit facility. For the second consecutive quarter, we reduced rental fleet spending to result in negative net rental cap-ex. Rates continued to be under pressure during the second quarter as our rental rates on new contracts decreased 15.8 percent from the second quarter of 2008 and 7.5 percent from the first quarter of 2009.” Magee added that while revenue numbers declined, the company’s parts and service revenues and gross profit were less volatile.
Based in Baton Rouge, La., H&E Equipment Services has 62 locations throughout the West Coast, Intermountain, Southwest, Gulf Coast, mid-Atlantic and Southeast regions. The company is No. 9 on the RER 100.