NationsRent Enjoys Strong Second Quarter Increase

NationsRent’s total second quarter revenue jumped 15 percent year over year, from $125.4 million in 2003 to $144.7 million for the three months ended June 30, 2004, company officials said last week. NationsRent boosted its rental revenue from $107.7 million in the second quarter of 2003 to $116.5 million in 2004, an increase of 8 percent year over year.

For the first six months of 2004, the improvement was even more dramatic. The company enjoyed a 21 percent increase in total revenue over the same period last year, with total revenue increasing from $218 million to $264.8 million. Rental revenue increased 8.8 percent, from $192.7 million to $209.5 million.

The more dramatic increase in total revenue shows a dramatic increase in sales of equipment, merchandise, service, parts and supplies, from $17.7 million for the second quarter of 2003 to $28.2 million for the same period in 2994, a 59 percent jump in that area, reflecting the stated intention of CEO Jeff Putman and other management to offer a more complete service to customers. A primary driver for the increase was sales of used equipment, which increased by $7 million in the second quarter, along with the new management team’s focus on sales of new equipment and related merchandise.

For the first six months the increase in that area was even more dramatic, from $25.3 million in 2003 to $55.3 million this year, a leap of 118 percent year over year.

Net income for the second quarter was $873,000.

Revenue from equipment rentals was positively impacted in the second quarter by a 2.8-percent increase in revenue at NationsRent at Lowe’s stores.

Utilization for the second quarter was 49.8 percent, up from 45.1 percent year over year. Gross profit margin on equipment rentals, including depreciation and lease expense, increase from 10 percent in Q203 to 25.1 percent this year. Gross profit on equipment rentals was positively impacted primarily by an $8.8 million increase in revenue and the elimination of $9.7 million of lease expense related to operating leases that were eliminated as part of the bankruptcy reorganization and recapitalization of the company in June 2003.

Fort Lauderdale, Fla.-based NationsRent is No. 6 on the RER 100.

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