H&E Equipment Services achieved sequential revenue growth of 14.2 percent in the second quarter, registering growth in all segments. The company increased its time utilization, sequentially, from 49.7 percent in the first quarter to 55.3 percent.
H&E began reinvesting in rental capital expenditures with improving market conditions. Net rental capital expenditures were $6.9 million, the first quarter of positive net spending since late 2008.
On the revenue front, total revenues declined 27.3 percent to $131 million for the quarter, compared with $180.2 million for the second quarter of 2010. Equipment rental revenues decreased 16.8 percent to $41.7 million, compared with $50.1 million in the second quarter of 2009. Gross profit plunged 27.3 percent to $32.4 million compared with $44.5 million for the same period a year ago. Gross margin was 24.7 percent, same as the year-ago quarter. Second-quarter 2010 gross margin on rentals was 31.1 percent, compared with 32.6 percent a year ago, the result of lower rental rates which declined 9.3 percent compared with Q209.
“Our business delivered solid sequential improvements in the second quarter despite ongoing challenges in the markets we serve, and, as we expected, the first quarter was a low point for the cycle,” said John Engquist, president and CEO of H&E. “Revenue for all our segments increased sequentially from the first quarter resulting in a 14.2-percent increase in total revenue. Our rental business continued to improve as units on rent once again increased, resulting in a 14.3-percent gain in rental revenue and a 63.4-percent gain in rental gross profit from the first quarter.”
“With improved market conditions in the second quarter, we began investing in our fleet once again, particularly earthmoving equipment,” added Leslie Magee, H&E’s chief financial officer.”Fleet utilization continued to improve and we are currently maintaining approximately 62 percent of our units on rent, versus 52 percent at the end of the first quarter. “We expect our rental business to continue to gain momentum as the year progresses. Our parts and service business is also improving, which is an indication that our customers are beginning to utilize their own fleets.”Based in Baton Rouge, La., H&E Equipment Services is No. 11 on the RER 100.