Hand-to-Hand Combat 100

May 1, 2004
In some ways, we've all seen this cycle before. It's the beginning of a recovery. The rental industry is rediscovering its confidence. Walking the trade

In some ways, we've all seen this cycle before. It's the beginning of a recovery. The rental industry is rediscovering its confidence. Walking the trade show floors at the winter conventions — Associated Equipment Distributors and World of Concrete in Orlando, the American Rental Association show in Atlanta, the Bauma show in Munich — equipment manufacturers were selling more machines than they could produce, leading to concerns about long lead times and how they could take advantage of pent-up demand. Rental people talked about having plenty of business, jobs breaking loose and demand catching up with supply. Signs on the horizon appear bright and brimming with growth potential.

But before we all buy new vacation homes, there are still issues that lead to pause for thought. Rental rates, which took as brutal a slashing over the past few years as, arguably, ever in the industry's history, are still rock bottom in many areas, and while rental companies, larger ones especially, talked of rental rate increases, many RER 100 executives see little improvement, if any, and say that rates are unable to bring the kind of return on investment to guarantee the bottom line they need. And boosts in the prices of oil and steel are causing manufacturers to pass the costs along to their customers by adding surcharges to the prices of equipment.

Looking at the numbers for 2003, more companies increased than decreased, although the increases were far from dramatic in most cases. But volume decreases didn't, in many cases, imply bad news as many companies made improvements that rental volume numbers don't reflect. A number of RER 100 executives said their companies decreased revenue but are more healthy today than they were two years ago as the economic slowdown forced them to make structural changes that have improved their companies and positioned them for stronger performances in the future. Just like certain aspects of a baseball player or team's performance don't show up in the box score, it bears noting that the RER 100 is based on rental volume and that volume is not necessarily indicative of profit margins or whether or not a company is prepared for a business increase.

An economic slowdown often implies the need for correction in the economy as a whole and in individual company infrastructure. Many companies saw the slump as a golden opportunity to improve their systems and find ways to make their companies leaner and more efficient, reducing headcount, and cutting general expenses, sometimes quite ruthlessly. Many seriously analyzed long-standing methods and looked for ways to streamline systems, often driven by more advanced information technology systems. These improvements will play a major role in determining how effectively those companies benefit from the better times most see on the horizon.

Not the least of these systemic changes involves rental rates, which continues to be a hot topic among RER 100 executives. Some have done significant restructuring because of rental rates. For example, Ahern Rentals (No. 15) has restructured the compensation system for its sales staff based on a series of matrixes that increase commission when rates reach a certain level and decrease it when rates drop below prescribed levels. H&E Equipment Services (No. 10) developed a software program to improve rental rates and other companies have put pressure on sales staff on the local level to raise rates. Fourth-ranked Sunbelt Rentals has fine-tuned its commission structure to reward rate improvement, while 9th-ranked Neff Rentals has re-evaluated rates and instituted a floor to keep staff from offering low rates based on emotion or desire to obtain a given rental contract at all costs.

Several large companies, most notable industry pace-setting United Rentals, have reported rate increases as high as 6.5 percent in the first quarter. While some RER 100 executives report they have seen no improvements in their marketplaces, others say they have seen upgrades, particularly on the local or regional level. But even this regional improvement points to the need for improvements on the local branch manager/sales staff level, as well as the need to improve consistency in applying organizational objectives through the national-regional manager-district manager-branch manager chain of reporting and communication.

Larry Pedersen, of Campbell, Calif.-based A Tool Shed (No. 85), who has not been shy about being critical of national chains in the past, says he has seen encouraging rental rate improvement in his marketing area and gives credit to the national chains for starting with themselves and making structural rate changes. Others, such as Hastings Puckett, of Puckett Rents (No. 58), counter by saying they have seen no evidence of improvement by national chains in their areas. Jim Dietz of National Lift Truck, Franklin Park, Ill. (No. 86) adds that rates are lower than they have ever been.

Some companies, such as Red Mountain Machinery (No. 66) have been able to improve rates by improved attention to computer-generated profitability studies. “Our sales force has had to take the approach of either get the rate up or the units will be sold off,” says Red Mountain CEO Owen Cowing.

Several companies have drawn the line in the sand more dramatically and suffered rental volume drops in the process. In a couple of cases, the companies were traditional distributors such as Binder Machinery (No. 97), which decided that if rental didn't provide an appropriate return, the company would concentrate on the parts and service and equipment sales portions of its business. Others took a hard look at rates on each piece of equipment they rented and decided that if those assets didn't provide an acceptable return on investment, the only alternative was to rid themselves of them. Some of these companies fall in the category mentioned above — those that may have suffered rental volume decreases but became more profitable in the process.

In terms of distributors, and nearly half of the companies on the RER 100 still see equipment distribution as their primary business model, the fever with which many pursued rental several years ago seems to have abated. Rental still remains a very vital portion of the business for many equipment distributors and the manufacturers they represent. Many, however, clearly found that the rental business was more complex than they realized, or found that they lacked the personnel to succeed in the short-term rent-to-rent business in a big way. How much of this shift is attributable to the recent slowdown, and how many of them will reinvigorate their rental program if rates improve and customer demand picks up, still remains to be determined.

Similarly, some manufacturers have had second thoughts about diving into the waters of rental-channel development. While Atlas Copco still owns the industry's second-largest rental company — Rental Service Corp. — many in the industry believe it would welcome the opportunity to divest its rental division, although recent actions taken by the parent company based on long-term strategic plans indicate an intention to stay in the business for the long haul. Others such as Komatsu and Deere have, after putting their toes in the water, either decided to stay on shore or hesitated about getting in deeper. Komatsu, which had experimented by acquiring several dealerships that it nudged into developing short-term rental programs, seems to have turned away from ownership of the distribution channel although many Komatsu dealers operate successful short-term rental divisions with more than half dozen Komatsu dealers on the RER 100. Deere, which had owned close to half of Phoenix-based Sunstate Equipment Rental (No. 13), sold its ownership portion to the majority ownership group.

However, manufacturer ownership of the rental channel has certainly not gone away. Caterpillar's rental program continues to grow, with Caterpillar evolving into the world's largest rental company with, at press time, 1,387 rental branches worldwide, and 379 in North America, where it would most likely rank in the top 5 on the RER 100 if the dealerships that own the rental centers weren't individually owned. More than ever before, Caterpillar dealers dominate the RER 100, representing 24 of the 100 listees, for a total of $733.3 million in estimated rental revenue. And this number does not include the dozens of dealerships that aren't listed.

Although it hasn't grown as fast as it originally projected, Volvo Rents' franchise program has grown steadily and stably. The company's management team has attracted a number of veteran industry professionals that have brought expertise, intelligence and perspective. By being able to monitor and advise franchisees on an ongoing basis, upper management has helped them achieve their goals and stay on the path to stability and profitability. The program certainly appears to be here to stay and Volvo Rents makes its first appearance on the RER 100 with rental volume estimated by RER.

In addition to the earthmoving manufacturer-owned rental programs, manufacturers such as Thompson Pump (No. 43), Waco Scaffolding (No. 45), SafeWorks LLC (No. 54), and Lynn Ladder & Scaffolding (No. 79) are renting direct and proving that manufacturers can occupy a specialized rental niche without competing with the companies they sell to. For example, Thompson Pump's rental division handles highly specialized applications that general rental companies and national rental chains typically can't handle, often referring business to or working in partnership with Thompson. Godwin Pump, not listed, has a similar rental program. Large generator manufacturers are getting into the rental game as well. Kohler, which operates Kohler Rental Power, has a thriving power-generation rental program through factory-owned branches and distributors. And engine and generator manufacturer Cummins rents large gensets through its distributor network and is a growing competitor in that market.

So although the movement toward manufacturers' ownership of the rental channel has not taken hold as quickly as many in the industry expected, many manufacturers who may have been considering that business model have had all they could do to stay afloat during the recent slump and might revisit the possibility during an upturn.

Any machines out there?

Most RER 100 executives are very positive about a potential upturn in the very near future. While some had expected 2003 to be a breakout year, it wasn't. More are predicting that 2004 will be, although about an equal number feel there is no such guarantee and see only a slight upturn in 2004 if that, but expect 2005 to bring more of a significant business boost.

To many manufacturers selling to the rental market, one major question lingers. Have rental companies increased buying because, after years of aging their inventories, they had no choice but to replace, and therefore were primarily buying replacement fleet? Some companies are definitely buying with expected growth in mind, although others are far more cautious. And that growth could be retarded by the lack of available machines.

Lengthened lead times could be, as one RER 100 executive says, a two-edged sword. While lack of availability could slow down the growth of rental companies who can't obtain needed machines on which to base expansion efforts or reach out to new markets, it could also create increased demand for rental services because if rental companies have long waits for needed equipment, so must the end users. One would assume many end users would rent if they would have to wait six months to buy a machine. Such concerns will certainly help to keep used equipment values high.

While many companies say they began to turn the corner in 2003, the consensus was that conditions were still quite tough. As Dave Griffith, CEO of Modern Group (No. 42) says, “We're still in hand-to-hand combat.” But the majority said 2004 was off to a better start and that demand from their customer base was clearly on the upswing for 2004.

Company Name (Last Year's Rank) Headquarters Top Officer 2003 Rental Volume in Millions 2003 Total Volume in Millions Number of Outlets Editorial Comments 1 UNITED RENTALS (1)
Greenwich, Conn.
Wayland Hicks
www.unitedrentals.com $2,177.5 $2,867.2 735 Although goodwill impairment and other charges led to a net loss, United increased same-store rental revenues, expanded market share, cut costs and reduced interest expense by refinancing. Will spend more on fleet in '04 and expand contractor-supply business. Pragmatic Hicks replaces visionary Brad Jacobs as CEO. Stalled highway legislation hindering traffic control division. 2 RENTAL SERVICE CORP. (2)
Scottsdale, Ariz.
Freek Nijdam
www.rentalservice.com $1,015.4 $1,354.0 483 Same-store rental revenues grew 3 percent in second half of '03, signaling an upward trend, despite continued softness in non-residential construction. De-emphasized new equipment sales to focus more on rental where average fleet utilization exceeded 63 percent for the year as company improved asset management. Grew online service capability with 40 percent jump in customer usage. 3 HERTZ EQUIPMENT RENTAL CORP. (3)
Park Ridge, N.J.
Gerry Plescia
www.hertzequip.com $828.0 $1,150.2 265 Holding a series of open houses this year to enhance connections with customers. Continuing growth internationally, looking for a rebound in all-important non-residential construction and industrial sectors this year. Devoted a lot of effort to improving internal systems and processes and researching new market possibilities. 4 SUNBELT RENTALS (4)
Charlotte, N.C.
George Burnett
www.sunbeltrentals.com $530.3 $553.1 199 Led by parent company Ashtead's CEO Burnett since Bruce Dressel's departure, Sunbelt plans a cautious expansion based on market improvements. Improving staff training, rates and fleet management and replacement systems. A new point of sale system brought improved efficiency and customer service. Fine tuning the sales commission structure toward rate improvement. 5 NES RENTALS (5)
Duff Meyercord
www.nesrentals.com $482.8 $567.1 141 Recently emerged from Chapter 11 with a restructured balance sheet, a new board of directors and an integrated IT system. Still must prove that it can succeed on the job site and on the local level. Soon to name a new CEO. 6 NATIONSRENT (6)
Fort Lauderdale, Fla.
Jeff Putman
www.nationsrent.com $424.3 $486.9 265 Emerged from bankruptcy with clean balance sheet and new rental-savvy management team, well-steeped in operations knowledge, fleet-management skills and a commitment to a full-service philosophy that this organization has lacked. It may take time to implement a still-evolving vision, but it's the most coherent vision it has had. 7 HOME DEPOT RENTALS (8)
Joe Dixon
www.homedepot.com $335.0* n/a 865 Continuing its fast track location-opening schedule. Possible addition of mini-excavators and skid-steer loaders along with small booms, scissors and backhoes makes the company more of a player in the contractor market, along with its pro departments. Will soon top 1,000 rental locations. 8 MAXIM CRANE (7)
Al Bove
www.maximcrane.com $310.0 $320.0 40 Has scaled down slightly, but still ranks tops among crane rental specialists for size, scope, market breadth and ability to provide services on a national level. Provides project management, training, rigging services, on-site evaluations and professional assistance on a national level. 9 NEFF RENTAL (10)
Juan Carlos Mas
www.neffcorp.com $173.0 $207.0 69 Strong improvement in second half of ‘03 and 1Q of ‘04 after return to private ownership and streamlining of geographic scope. Added management in sales, service, training and business development. Instituted companywide floor rates and overall rate increases. 10 H&E EQUIPMENT SERVICES (9)
Baton Rouge, La.
John Engquist
www.he-equipment.com $153.9 $413.7 41 Largest rental growth was in aerial area in 2003. While rental revenues increased, same-store rental revenue dropped because of lower time utilization in crane and aerial segments and lower aerial rental rates. Company de-emphasized smaller rental equipment, improved time utilization for earthmoving segment. 11 AGGREKO (11)
New Iberia, La.
George Walker
www.aggreko.com $135.0 $183.0 59 A truly global power generation specialist with about 120 locations in 28 countries, although listed revenues reflect North American market. More competition in power-generation causing strategic changes such as greater emphasis on local projects, reorganization to hub-and-spoke model and shift internationally into more densely populated, faster growing regions. 12 AMECO (13)
Greenville, S.C.
Gary Bernardez
www.ameco.com $134.0 n/a 34 Involved with massive projects in Iraq, Jamaica, Mexico and more, still doing traditional distribution-type business in Mexico and Puerto Rico. Parent Fluor divested U.S. distribution locations. Focusing more on site services and fleet management. 13 SUNSTATE EQUIPMENT (12)
Mike Watts
www.sunstateequip.com $128.6* n/a 46 Watts and management team bought out Deere's partial ownership interest, returning full ownership to Watts' group. Spending more on fleet as business conditions improve. Expects strong growth in 2004, although availability of equipment because of long lead times might be a factor. 14 BRIGGS EQUIPMENT (14)
Homer Denning
www.briggsequipment.com $112.6 $345.0 37 Leading provider of Yale lift trucks and fleet services in U.S. and Mexico, and one of biggest Case dealers. Big emphasis on service with technicians making up more than half of its employees. Big investments in GPS technology and training of sales and management personnel. Specializes in lift-truck and construction rental, long-term rental contracts. 15 AHERN RENTALS (15)
Las Vegas
Don Ahern
www.ahernrentals.com $98.5 $110.7 30 Continuing to expand with new acquisitions on the horizon, augmented by strong organic growth. Developed matrix to reward sales staff for high rates rather than total volume. Started separate facilities to concentrate on repair of customer-owned equipment. Also manufacturing forktrucks. California growth coming close to rivaling its Vegas roots. 16 FINNING (17)
Edmonton, Alberta
Ian Reid
www.finning.ca $86.4 $1,083.9 25 By opening 13 Cat Rental Store branches in 2003, Finning signaled its intention to remain a dominant rental player in Western Canada. Major player in Alberta's oil sands equipment market as well as small equipment rental to contractors, industrial plants and commercial operations. Growing in U.K. and South America although figures are for Canada operations. 17 GE ENERGY RENTALS (16)
Luis Ramirez
www.gepower.com $85.0* n/a 16 Expects acceleration of demand for power-generation rental services in North America and globally. 24/7 customer call center has grown demand as has instability of North American power grid as blackouts and disasters have shown. Concentrates on entertainment, industrial and utility energy markets. 18 HOLT CAT RENTAL (21)
San Antonio
Allyn Archer
www.holtcat.com $55.0 $500.0+ 14 Celebrating 100-year anniversary of track-type tractor, designed by great-grandfather of dealership CEO Peter Holt. Growing in Cat Rental arena, adding strength in power-generation and engine divisions. 19 VOLVO RENTS (—)
Asheville, N.C.
Barry Natwick
www.volvo.com $54.0* n/a 42 Franchise network of independent Volvo Rents stores has grown steadily and solidly, albeit slower than original projections. Sound strategy, intelligent leadership, high-quality Volvo and allied equipment are good signposts toward lasting success. Company supports with store-opening coordination, promotions, risk management procedures, software, operation and fleet planning, financial review and more. 20 HSS RENTX (18)
Paul Nolan
www.hssrentx.com $52.9* $57.5 79 New ownership should energize and provide focused strategic goals. Reshaping branch footprints to strengthen distribution and optimize service in larger metropolitan markets where company is establish and see viable growth opportunities. 21 WAGNER RENTS (22)
Bruce Wagner
www.wagnerequipment.com $45.2* n/a 15 A surplus of competition and fierce rate wars made last year's going tough for one of the pioneers of Caterpillar's equipment rental efforts. Expects solid growth in ‘04 thanks to market upturn. Off to a good start after a fairly mild winter that facilitated an early start to this year's construction season. 22 BATTLEFIELD EQUIPMENT RENTALS (23)
Stoney Creek, Ont.
Randy Casson
www.battlefieldequipment.ca $44.6 $81.9 33 Canada's leading eastern rental company, and one of its largest Caterpillar dealers, is particularly strong in vibrant Ontario, as well as Manitoba and Newfoundland, with one of the Cat Rental Store network's most wide-ranging inventories. Canada's economy seems well poised for continued growth. 23 EMPIRE MACHINERY (24)
Mesa, Ariz.
Jim Lowry
www.empire.cat.com $44.0* n/a 10 Strong Caterpillar dealership infrastructure — including machinery, power systems, hydraulic service, precision machining and transport divisions — provides bedrock customer support environment. Precision machining and transport developed to serve company needs have grown to become major divisions providing customer services. One of the top rental players in the Southwest. 24 RED-D-ARC WELDERENTALS (—)
Austell, Ga.
Mitch Imielinski
www.red-d-arc.com $40.0 $52.0 32 Leading welding rental specialist with strong presence in U.S. and Canada with a Mexican branch as well, with more than 30,000 pieces, mainly welding and positioning equipment. Can handle refinery shutdowns where 500 welders may be needed and smaller tools when customers require complete welding packages. 25 ECCO EQUIPMENT CORP. (28)
Santa Ana, Calif.
Don Schmid
www.eccoequipment.com $40.0 $42.1 7 Covers California, Utah, Nevada and Arizona with heavy equipment up to 76 metric ton excavators, 55-ton articulated trucks, 570-hp dozers and more, with or without operators. 26 LB SMITH CO. (19)
Charlotte, N.C.
Bill Cummins
www.lbsmith.com $39.0* $370.0* 26 One of Volvo's biggest U.S. dealers was in financial trouble, so Volvo acquired its assets rather than face rebuilding a major part of its dealer network. Now beginning to divest those assets with last month's sale of Florida branches to Flagler Construction. 27 RING RENTS (26)
Tampa, Fla.
Lance Ringhaver
www.ringhaver.com $38.0 n/a 12 Operates crane dealership in addition to standard Caterpillar products and services. Has 12 Cat Rental Stores in northern and central Florida. 28 AIS RENTAL CORP. (27)
Grand Rapids, Mich.
Larry Behrenwald
www.aisequip.com $36.0* $200.0* 7 In rental for more than 40 years, one of the leading heavy construction rental firms in the upper Midwest. Although offers smaller equipment such as generators and air compressors, its bread is buttered on the heavy side, up to 148,000-pound Komatsu excavators, 85,000-pound dozers, 125-foot telescopic platforms. 29 HOLT OF CALIFORNIA (68)
Pleasant Grove, Calif.
John Johnson
www.holtca.cat.com $34.3* n/a 6 Enjoyed strong growth year in ‘03, should be well placed for 2004. In business 73 years, covers 16 counties for full Cat line and all northern California for Caterpillar lift trucks. Strong in chipper rental market and offers hydraulic services to customer equipment as well as Cat. 30 OHIO CAT (50)
Broadview Heights, Ohio
Kenneth Taylor
www.ohiomachinery.com $34.1* n/a 8 Nearly doubled in size with acquisition of Holt Caterpillar, now covering 89 counties in Ohio, Kentucky and Indiana for Caterpillar. Rental inventory includes soil compactors, 30' to 80' booms, telescopics and more. 31 IMPERIAL CRANE SERVICES (44)
Bridgeview, Ill.
B. J. Bohne/Lance Bohne
www.imperialcrane.com $34.0 $38.0 3 Major player in Chicago construction and industrial market with wide-ranging crane fleet up to 300-ton lattice and conventional crawler cranes. Also supplies aerial work platforms, carry-deck, truck and rough-terrain cranes. Represents Tadano cranes, Barko material handling and Genie aerials. Rents Grove, Liebherr, Terex, Link-Belt. 32 MUSTANG RENTAL SERVICES (35)
Channelview, Texas
Louis Tucker
www.mustangcat.com $32.7 $32.7 8 One of the leading rental companies in southeast Texas, has been operating standalone rental facilities since the late ‘80s, one of the first Cat dealers to excel in rental. Also offers allied equipment and is one of Cat's top power generation rental specialists. 33 CASHMAN EQUIPMENT (43)
Las Vegas
Mary Kaye Cashman
www.cashmanequipment.com $32.5* n/a 5 Offering machine security system for theft-prevention. Developed program with Empire Machinery and Mesa Community College to train technicians and offer internships as they earn college degrees. Caterpillar dealer for Nevada. 34 LOUISIANA RENTS (32)
Reserve, La.
Jay Dinger
www.louisianamachinery.com $32.0 n/a 6 Putting more emphasis on Cat earthmoving line, reducing allied equipment and tools and dropping offshore specialization, which led it to close Port Fouchon and Morgan City branches, opened new dedicated rental facility in Lake Charles. Still a force in petrochemical and power generation markets. 35 KELLY TRACTOR (37)
John Socol
www.kellytractor.com $31.5* n/a 10 South Florida Cat and Link-Belt crane dealer, also joined Atlantic and Southern Equipment to represent Link-Belt line in Georgia. 36 STAR RENTALS (31)
Bob Kendall
www.starrentals.com $31.4 $46.3 16 Pacific Northwest economy lagging behind, but solidly managed Star adjusts with the best. Founded in 1900 as Star Machinery, still doing business with many of the same leading Northwest companies that were around a century ago. Expanded operations and maintained staff despite Northwest slowdown. 37 LOCATION SIMPLEX (42)
Andre Veronneau
www.simplex.ca $31.3 $38.7 28 Nice increase for Quebec-based aerial specialists with wide-ranging general rental inventory. Entire 112-page catalog with rates and specs available for download in English and French. Began by Veronneau family in 1907 as floor-sanding company. 38 NORTHRIDGE EQUIPMENT RENTALS (34)
Northridge, Calif.
Mike Groff
www.northridgerentals.com $30.8* $33.5* 5 Large fleet of aerials, forklifts, light towers, generators and more keeps Northridge at the top in construction, industrial and studio rentals. 39 TRICO EQUIPMENT (33)
Vineland, N.J.
Joseph Pustizzi Jr.
www.tricoequipment.net $30.0 $61.0 9 Brothers Joe and Ken Pustizzi continue company's strong dedication to maximizing uptime. Concentrate on earthmoving with Case dealership and rental as well as large aerial fleet. Talented professional staff specializes in creative approaches to finding jobsite solutions. 40 WAJAX (40)
Mississauga, Ont.
James Burns
www.wajax.com $29.2 $326.0 31 Expanding material handling rental fleet. Rental revenues improved despite relative weakness in Canadian forestry and mining sectors, important markets for Wajax, which is a big distributor representing Hyster, Hitachi, Timberjack, Terex, Euclid and JCB. 41 HAWTHORNE RENT-IT SERVICE (29)
San Diego
Tom Hawthorne
www.hawthorne.cat.com $27.0 $33.0 10 Established in the 1950s and a dedicated rental company for three decades, veteran Hawthorne wrote the book on the unity between dealership and rental. Decline in revenue in '03 reflects soft market, battered rates, and is no cause for alarm. 42 MODERN GROUP LTD. (38)
Bristol, Pa.
Dave Griffith
www.moderngroup.com $26.2 $141.4 21 Expecting a flat 2004, with the industrial forklift market very slow and a slow start, but parts and service still increasing. Has concentrated on cutting costs to be poised for bottom-line improvement as business conditions improve. Company became fully employee-owned last year. 43 ANDERSON EQUIPMENT CO. (36)
Bridgeville, Pa.
Judy Anderson
www.andersonequip.com $25.0 n/a 14 Big in construction, mining and highway construction in Pennsylvania, N.Y., West Virginia, especially with Komatsu and Ingersoll-Rand equipment. Became key rental player with acquisition of Rupp in 1996. Continuing to work on refining its product lines and services. 43 THOMPSON PUMP (—)
Orange, Fla.
Bill Thompson
www.thompsonpump.com $25.0 n/a 17 Best known to most rental companies as an innovative manufacturer of a variety of heavy-duty pumps, Thompson gets much of its rental business when rental companies refer highly specialized jobs they can't handle. Prefers to work as a supplier in partnership with rental channel rather than a competitor. Particularly strong in Southeast, although clientele is international. 45 WACO SCAFFOLDING & EQUIPMENT (39)
Marty Coughlin
www.wacoscaf.com $24.5 $69.0 15 A major scaffolding manufacturer with string of company branches, with an inhouse engineering department to help plan applications and design solutions. Also specializes in shoring, forming and containment services. Although strongest in Midwest, Waco has branches in California, New Jersey, Arizona, Pennsylvania and West Va. 46 MACHINERY POWER & EQUIPMENT(20)
John Harnish
www.ncmachinery.com $24.0* n/a 9 NC Machinery, the Caterpillar dealer in western Washington, Alaska and Russian Far East, with additional Cat Rental Stores in Montana and Wyoming, recently scaled back rental operations, laid off rental personnel and incorporated service and delivery with dealership. Heavy unemployment in Northwest an obstacle to business growth. 47 CLAIREMONT EQUIPMENT (47)
San Diego
Jerry Zagami
www.clairemontequipment.com $23.9 n/a 6 Another good rental increase for Komatsu dealer/rental center that specializes on the heavy side. Celebrating 30 years in business, company that evolved from party and small equipment also does strong business in service agreements on customer-owned machines, field service and preventive maintenance contracts. 48 ART'S RENTAL EQUIPMENT (49)
Newport, Ky.
Ken Arlinghaus
www.artsrental.com $23.7 $31.9 11 Nice increase for Kentucky, south Ohio and Indiana rental company. Redesigned effective online reservation system on graphically appealing Web site that shows items, suggested attachments and rates. May be an industry pace-setter in online rentals. 49 YANCEY BROS. (—)
Austell, Ga.
Tom Tucker
www.yanceybros.com $23.5* n/a 13 Has six dedicated Cat Rental Stores and seven additional Yancey rental locations. Celebrated 90 years in business last month, with hundreds of guests, equipment displays and the presence of Cat's CEO. Also handles Vermeer, Amida, National Crane, Wacker, Multiquip, Miller, Sullair, Kubota and other national brands. 50 EQUIPMENT DEPOT (46)
Waco, Texas
Don Moes
www.eqdepot.com $23.0* $93.0 9 Added three branches by acquiring assets of Caterpillar Lift Truck dealer in Laredo, MacAllen and Corpus Christi. Still in growth mode with plans to add more branches, expects a solid year in ‘04. Factory-trained technicians conduct 30-point rental inspections after each rental. Handles aerials, backhoes, skid-steers, rough-terrain forklifts in addition to industrials. 51 STEPHENSON'S RENT-ALL (51)
Mississauga, Ontario
Willie Swisher
www.stephensons.ca $22.0 $27.0 20 Off to a good start in '04. Nearly completed hub-and-spoke footprint for Toronto area, with three hubs and 17 spoke locations. Has redirected marketing towards professional contractor base. Wants to expand fleet but concerned about equipment availability. Centralized and streamlined trucking and improved rates where possible. 52 SCOTT CONSTRUCTION EQUIPMENT (74)
Monroe, La.
Scott Cummins
www.scottcompanies.com $21.0 $250.0 13 A dealer for Case, Volvo and Link-Belt, Scott has the benefit of a 65-year history. Primary market area is Louisiana, with branches in Mississippi, Texas and Arkansas as well, rich in industry, farming and construction applications. 53 GREGORY POOLE EQUIPMENT (41)
Charlotte, N.C.
Gregory Poole III
www.gregorypoole.com $20.9 $245.0 4 Eastern North and South Carolina Cat dealer with wide-ranging inventory of Cat as well as allied equipment, and a long-time player in industrial forklift market. 54 SAFEWORKS LLC (47)
Tukwila, Wash.
Dave Voeller
www.spiderstaging.com $20.7 $55.3 26 Slight revenue drop for scaffolding, mast climbing and general powered access manufacturing, distribution and rental specialists with strong base in commercial construction and maintenance markets. Makes and rents diverse line of fall-protection equipment. Redesigned Web site as good as Spiderman. 55 CONECO EQUIPMENT (53)
Edmonton, Alberta
Sam Cosgrove
www.coneco.ca $20.6* n/a 10 Alberta's oil-sand extraction business should make the western province a strong area for years to come. Believed to be one of the most successful Komatsu dealers, also strong in rental. 56 SOUTHEASTERN EQUIPMENT CO. (64)
Cambridge, Ohio
William L. Baker
www.southeasternequip.com $20.0 $98.0 16 Veteran Case dealer with strong rental history in Ohio, Indiana and Kentucky. Big rental increase in 2003. Depending on the area, serves as dealer for Kobelco, Gradall, Bomag, New Holland, Terex, Broce and more. 57 PUERTO RICO WIRE (55)
San Juan, P.R.
Jose Cestero
www.puertoricowire.com $19.5 $53.0 5 Nice increase for Puerto Rico's biggest rental firm, specializing in construction, scaffolding and forming systems. Main lines include Ditch Witch, Bomag, Atlas Copco, Skytrak and Kobelco. 58 PUCKETT RENTS (88)
Richland, Miss.
Hastings Puckett
www.puckettrents.com $19.4 n/a 9 Only in dedicated rental since 2000, already one of South's leading Cat Rental Store networks. Has made considerable effort to raise rate levels. Concerned that lengthening lead times will impact ability to react quickly to market changes. 59 LOCATION HEWITT (—)
Pointe-Claire, Quebec
Pierre Pontbriand
www.hewitt.ca $19.0* n/a 11 Caterpillar dealer for Quebec and western Labrador and Cat lift truck dealer for much of Ontario, has played a major role in Quebec's development, including the St. Lawrence Seaway and major hydroelectric projects. Has Cat Rental branches in Quebec and maritime provinces, having acquired several independents along the way. 60 COMPRESORES & EQUIPOS (56)
San Juan, P.R.
Francisco de Armas
www.compresores.com $18.5 $18.8 6 Economy beginning to rebound and demand is improving, especially in earthmoving segment. Spending money on replacement and growth fleet, which hasn't done in a few years, especially in earthmoving segment as new projects begin. Market hasn't suffered the same severe rate-slashing as U.S. market. 61 PETERSON RENTS (60)
San Leandro, Calif.
Eric Martin
www.petersonpower.com $18.0 $32.0 6 Another strong year for northern California Cat dealer covering 21 counties in and around the San Francisco Bay Area. One of Cat Rentals long-running success stories. 61 TEMP AIR (52)
Burnsville, Minn.
Dick Brown
www.tempair.com $18.0 n/a 11 Rental decrease for air-control specialists that offers cooling towers, chillers, pumps and piping accessories. 63 NORTH CENTRAL RENTAL & LEASING (45)
Fargo, N.D.
Dan Butler
www.butler-machinery.com $17.8 n/a 8 Rental numbers dropped primarily because large projects from previous years finished up, but no new major projects started up to take their place. Rental rates suffering from usual competitive pressures. Hoping for rebound in construction and breakthrough in federal highway legislation. Cat dealership going strong in agricultural area. 64 PATTEN INDUSTRIES (58)
Elmhurst, Ill.
Crain Patten
www.pattenind.com $16.7 n/a 6 Chicagoland Cat dealer offers such allied lines as Multiquip, Compair, Almand Bros., Thompson Pump, Flygt, Target and Stihl. 65 ADMAR SUPPLY CO. (60)
Rochester, N.Y.
Richard DiMarco
www.admarsupply.com $16.4 $27.3 4 Strong general rental construction company, a leading rental force in upstate New York. Recently took on Kubota excavator line. Off to a good start in '04 with increased demand and utilization. Has already upgraded fleet. Hired marketing manager to do targeted direct mail campaigns. Looking to open a new branch this year. 66 RED MOUNTAIN MACHINERY (60)
Chandler, Ariz.
Owen Cowing
www.redmountain.com $16.3 $18.8 3 Has increased rates on some models because of its own computer-generated profitability studies. Confident that adapting and adjusting to lean years improved profitability and efficieny in the long haul. Specializing in big heavy equipment with detailed planning of transporting and hauling logistics. 67 ATLANTIC RENTALS (65)
Woodstock, New Brunswick
Heath Alexander
www.atlanticrentals.com $16.1* $28.8* 16 Had a good year despite rate concerns and what management considers an over-saturation of a small market. 68 COWIN EQUIPMENT CO. (63)
Birmingham, Ala.
James Cowin
www.cowin.com $15.8 $84.6 7 Continuing to experience strong volume and profitability. Began renting air compressors in Birmingham in 1938 and now has rental inventory of $50 million. Cowin has a strong distribution division as well, representing Grove, Ingersoll-Rand, Kobelco, Kawasaki and Liebherr, among others. One of the deep South's strongest rental firms. 69 CONTINENTAL EQUIPMENT (69)
Michael Detzler
www.thenewcontinental.com $14.4* n/a 5 Komatsu dealer with strong rental program also handles Dresser, Gradall, Trail King, Hamm and other lines. Big construction is its specialty, holding its own in tough Texas market. 70 STOWERS MACHINERY (67)
Knoxville, Tenn.
Wes Stowers
stowers.cat.com $14.2 $120.0 6 East Tennessee Caterpillar dealer since 1960, Stowers opened its first dedicated rental facility in 1997 and has developed fast. Management team has strong local and industry reputation. 71 MIDATLANTIC RENTS (77)
Hatfield. Pa.
Jim McKeever
www.furnival.com $14.0 n/a 7 Formerly known as Furnival — and its Web site soon will reflect the change — changed name to MidAtlantic, which is a better reflection of who it is. Trying to focus more on core equipment lines, mainly Komatsu and other heavy equipment lines, and less on being a one-stop-shop. McKeever has worked to raise rental rates. 72 ROLAND MACHINERY (70)
Springfield, Ill.
Ray Roland
www.rolandmachinery.com $13.7 $117.9 15 One of the industry's top Komatsu dealers, a strong force in rentals in the Midwest. A big sales year, with big emphasis on parts and service, preventive maintenance contracts, oil analysis, a one-stop-shop of product support. 73 AMERICON (71)
Lexington, Ky.
John King
whayne.cat.com $13.4* n/a 8 The rental division of Whayne Caterpillar, a 90-year old dealership known for strong management and service. 74 HUGG & HALL EQUIPMENT (72)
Little Rock, Ark.
John Hugg/Robert Hall
www.hugghall.com $12.8 $57.5 6 Major southern player in new and used forklifts, aerials, and Volvo heavy equipment with nearly four dozen factory-trained road technicians covering the state and surrounding areas. Had strong second half after slow beginning in '03, off to strong start in '04. With good construction activity in market, expects a big year. 75 HANDY RENT-ALL CENTER (73)
Wappingers Falls, N.Y.
Gene Lois
www.handyrent-all.com $12.8 $13.7 10 Had an improved 2003 and is off to a good start in ‘04 with expectations of a very good year. Traditionally, a general rental player in the Hudson Valley region oriented toward the small contractor, but has added excavators, dozers and large loader-backhoes, and done very well with the larger items. 76 REBEL RENTS (54)
Temecula, Calif.
Rick Clause $12.0* — 10 Essentially run by GE Capital since bankruptcy proceedings. Covers growing inland Southern California market area with a lot of growth potential. 77 MIDWEST AERIALS & EQUIPMENT (83)
St. Louis
Daniel Tumminello
www.midwestaerials.com $11.5 $14.6 3 A solid year for aerial specialists who started from scratch in ‘98 and now have 1,400 units and three stores. Doesn't seem troubled by big competitors. 78 DIAMOND RENTAL (78)
Salt Lake City
Mark Clawson
www.diamondrental.com $11.4 $12.7 11 Picked up good people during recession and increased market share along Utah's Wasatch Front. Clawson's vision and financial acumen combined with rental operations leadership by Leonard Sedillo have proven a winning combination. Growing merchandise sales, delivery capability and revenue and potential to expand are making this a company to watch. 79 LYNN LADDER & SCAFFOLDING (79)
Lynn, Mass.
Frank Koughan
www.lynnladder.com $10.8 $42.5 11 Full line manufacturer and distributor of scaffolding, ladders truck equipment and specialty items. The company's products are distributed through its locations in Massachusetts, New Hampshire, Maine, Pennsylvania, Maryland, Connecticut, North Carolina and South Carolina to the general public with a concentration in the construction industry. 80 BERRY COMPANIES (81)
Wichita, Kan.
Walter Berry
www.berrycompaniesinc.com $10.5 $122.7 22 A slow inconsistent '03 especially in Kansas City and aircraft-dependent Wichita. Colorado starting out stronger in '04. Midwest markets seem behind the curve as far as a recovery, but CEO Berry optimistic for an '04 revival. Skid-steer loaders are main rental item and rental rates continue to be respectable throughout market area. 81 CRESCENT MACHINERY (57)
Fort Worth, Texas
Eric Anderson
www.crescentmachinery.com $10.0 $27.2 8 Completed reorganization process and emerged as new, privately held company last May. Closed far-flung West Coast branches and is focusing on Texas and Oklahoma. Not expecting much upward rate movement in highly competitive area. Has reduced business costs 40 percent in past few years. 82 RENTALMAX LLC (86)
Wheaton, Ill.
Terry Hagy
www.rentalmax.com $9.7 $10.4 10 Slight revenue increase for Chicago-area general rental company with a wide-ranging inventory for homeowner and contractor customers. Concentrated on improving utilization and efficiency. Senses a cautiously optimistic attitude for '04 from customer base. 83 ALL STAR RENTS (87)
Fairfield, Calif.
Ken deVries
www.allstarrents.com $9.5 $11.1 9 A strong general rental player east of the Bay Area. Continual internal growth through employee training and fleet improvement. Adding outside sales help will be a focus for '04. Raised rates over the winter to help offset increasing overhead. Always trying to improve processes and think ahead. 84 BLANCHARD MACHINERY CO. (—)
West Columbia, S.C.
Joe Blanchard
www.blanchardmachinery.com $9.1 $18.7 5 Joined with Carolina Cat and Gregory Poole Equipment to acquire Arrow, the Blaw-Knox, Hypac and Lull dealer for North Carolina, which will help it improve Cat's position in paving products market in the Carolinas. Expects increased demand and improved rental rates for '04. Recently opened Greenville branch. 85 A TOOL SHED (83)
Campbell, Calif.
Larry Pedersen
www.atoolshed.com $9.0 $9.0 8 A tough year with reduced revenues and head count, exacerbated by exploding California insurance and workers' comp costs. Ahead of last year so far in ‘04. A true family business with Pedersen and three sons playing major roles. Strong in small equipment and homeowner rentals. 86 CATE EQUIPMENT CO. (92)
Salt Lake City
Perry Pardoe
www.cateequipment.com $8.0 $40.0 6 Dealer for Ingersoll-Rand, Blaw-Knox, Rosco, Gomaco, Wirtgen, Gorman-Rupp, Crafo, Terramite, Leeboy and more. 86 CLM EQUIPMENT CO. (74)
East Broussard, La.
Floyd Degueyter
www.clmequipment.com $8.0 $28.0 4 Southern Louisiana and Southeast Texas Kobelco, Case and Kawasaki dealer saw its numbers drop in '03. Operates on the heavy side, with excavators up to 180,000 pounds, carry-deck cranes, Broce brooms and more. 86 NATIONAL LIFT TRUCK (93)
Franklin Park, Ill.
Jim Dietz
www.nlt.com $8.0 $18.0 1 Will target industrial market more in '04, especially sales and service side. Trying to grow sales support on the street and in the office, using technology as an aid. Concerned about steel shortages affecting lead time on large forklifts. 86 T-K-O EQUIPMENT CO. (89)
Grand Prairie, Texas
Wilburn Smith
www.tkoequipment.com $8.0 $16.6 3 Big Texas and Oklahoma heavy equipment player in heavy construction and crushing equipment. Has more than 200 units including dozers, scrapers, compactors/rollers, excavators, loaders, loader/backhoes, motor graders, recyclers, water wagons, and off-road trucks. 90 CALIFORNIA HIGH REACH (—)
Modesto, Calif.
Roy Airington $7.8 $8.6 2 Started in 2000 by former general manager of Thomas Equipment, a California Central Valley high-reach specialist. Now has more than 1,000 units, booms, scissors and claims the largest fleet of extendable forklifts west of the Mississippi. Delivers south to Bakersfield, north to Chico, through Bay Area and Central Valley. 90 PDQ RENTALS (94)
Santa Fe Springs, Calif.
Dennis Turner
www.pdqrentals.com $7.8 $9.7 2 Diversified by taking on Komatsu dealership, a significant cultural change for a decades-old, family-owned general rental company. 92 ROAD MACHINERY CO. (74)
Marius Fabret
www.roadmachinery.com $7.6 $81.0 5 Komatsu dealership with rental division, remanufacturing and engine rebuild facility. 93 ELLEN EQUIPMENT (90)
Aurora, Colo.
Steve Carlson
www.ellenequipment.com $7.5 $8.0 4 Up 11 percent in first quarter, with construction activity increasing steadily. Company decreased inventory in '03, thus decreasing revenue but boosting profitability. All indications are for a period of increased activity in New Mexico and eastern slope of the Rockies in Colorado. 94 A&G ASSOCIATES (95)
Leonminster, Mass.
Roger Gamache
www.taylor-rental-ma.com $7.4 n/a 13 Network of independently owned former Taylor franchise stores, catering to homeowner and small contractors in small to mid-sized New England communities, primarily Massachusetts. ‘04 starting off with slight uptick. 95 RIVER VALLEY EQUIPMENT (—)
Edmonton, Alberta
Bud Nowicki
www.rivervalleyequip.com $7.3 $13.1 2 Heavy construction equipment rental and sales firm with large inventory of articulated trucks, crawler tractors, compactors, motor graders, wheel loaders, crawler loaders, excavators and motor scrapers by Caterpillar, Volvo and Hitachi. Experienced sales staff plays a major role in advising customers on applications. 96 STRONGCO (—)
Mississauga, Ontario
Larry Pirnak
www.strongco.com $6.9 $225.0 5 Has substantially reduced its rental fleet assets over the past two years, a process it will continue, thus reducing depreciation costs, repairs and financing costs and enhancing returns from remaining fleet by improving utilization. 97 BINDER MACHINERY (82)
South Plainfield, N.J.
Robert Binder
www.bindermachinery.com $6.5 n/a 2 Large Komatsu equipment earthmoving specialists reduced rental fleet by half because of poor rates, while increasing machine sales, parts and service. Strong first quarter of ‘04 in parts and service, a good barometer indicating that a lot of work is on the horizon for customers. 98 TOPP PORTABLE AIR (—)
Aston, Pa.
Daniel Topp
www.etopp.com $6.4 $10.3 8 Recognized as one of the fastest-growing firms in the Philadelphia area, a specialist in portable air conditioning, temporary heating and large-area dehumidification applications for construction, special events, industrial and commercial applications. Has had success with military applications as well. 99 PIONEER EQUIPMENT RENTAL & SUPPLY (—)
Ponca City, Okla.
John & Larry Redwine
www.pioneerrental.net $6.3 $7.6 7 Concentrating on smaller and rural markets, with a wide-ranging inventory of tools, earthmoving equipment and high-reach. Six branches in Texas and one in Oklahoma. 100 KNICKERBOCKER RUSSELL CO. (98)
Howard Creese
www.knickerbockerrussell.com $6.2 $15.1 1 After a poor start in '03 with little work going on in the area, ended up close to '02 totals. Off to a great start in 2004. Has one of the most experienced, stable staffs in the industry. RER 100 Fast Fact:
20 companies on the 1997 RER 100 were acquired that year. 36 listees on the 1999 RER 100 were acquired that year. 2 listees on the 2003 RER 100 were acquired last year — Holt Caterpillar of Ohio (No. 59 last year) was acquired by Ohio Machinery (now Ohio Cat); and Skyreach Equipment (No. 25 last year) was acquired by United Rentals. *Denotes RER estimate based on regional economic conditions, industry sources and interviews by members of the RER staff. Revenue figures are based on actual reported revenue for North American operations for the year 2003. Location data are as of April 25, 2004. While every effort is made to ensure accuracy and thoroughness, omissions sometimes occur. All figures are in U.S. dollars.

From Order-Takers to Rainmakers

For several years, Neff Rental was widely viewed in the industry as the least successful of the national chains that went public in the late 1990s, and rumors were rife of impending bankruptcy or sale. But since Juan Carlos Mas took over as CEO in early 2002, returning leadership to the Mas family that founded it, Neff has begun quite a process of change, reducing debt, taking the company private and revamping the company's organizational structure. RER's Michael Roth recently spoke with Mas about how the company has changed and his projections for 2004.

RER: Do you expect 2004 to be a better year than 2003 and how did Neff Rental improve itself?

MAS: We do expect a better year in 2004. Many of our actions through the down cycle began to pay dividends with strong improvement in the second half of 2003 and Q1 2004. We believe this improvement is a function of our increased operational efficiencies, training and innovative sales programs coupled with a strengthening economy and rental rate environment.

Did you make changes during the downturn that resulted in a better company?

We made various changes in our business during the industry downturn. We constrained our cap ex budgets to address the issues of oversupply in the marketplace and effectively reduced under-performing fleet and deployed those dollars to higher return categories. We streamlined the number of regions we operated in and strengthened our region and corporate staffs by adding additional service managers, training personnel, business-development managers and sales management. We focused intensely on having more information about our customers' business and managing our sales process to improve the success rate of our sales force. This has allowed us to be more selective in our customers and more successful in targeting the most likely customers to rent from Neff at an acceptable rate. We are well on our way to converting our sales force from order takers to rainmakers.

What kind of improvements will you concentrate on in 2004?

We will continue to tweak our fleet mix to adjust to our customers' need and to continue growing the high ROI categories and divesting of under-performing fleet.

What do you consider the biggest areas of concern in the rental industry currently?

I believe the industry's biggest concern should be the oversupply of equipment in the marketplace. This industry has a very sensitive supply/demand curve. The strengthening rate environment can easily erode if fleet growth is met with weakened or static demand. Hopefully, the industry has learned that not only must there be reasoned purchasing and an efficient cost structure, but also a new model relative to fleet age and service/maintenance.

Rates have been a major concern in most of North America over the past few years. Have you seen a rate improvement in the marketplace and what has Neff done to control and improve its rate structure?

We have seen substantial rate improvement in the past 10 months and believe that is a direct result of the aforementioned programs. We have also instituted various accountability and management tools. One of these tools is instituting floor rates throughout the company to prevent the urge to make a deal on emotion at a low rate.

Are you concerned about growing lead times from manufacturers or higher costs of equipment because of rising steel prices or other cost-related issues? Will this be a problem for you in the coming year?

As a result of improved industry conditions and the aging of the fleet the whole rental industry appears to have made a substantial increase in capital expenditures this year. This, compounded with the steel shortage, has put a strain on manufacturer lead times and leading to steel surcharges from a number of manufacturers. We have not had any problems with our 2004 purchasing, but do understand the issue could impact us in our 2005 program.

Weeding Out the Losers

Red Mountain Machinery, based in Chandler, Ariz., with branches in Escondido, Calif., and Las Vegas, has carved out a niche for itself with the rental of heavy equipment in a large territory in the Southwestern United States. RER recently spoke with CEO Owen Cowing about current business conditions, Red Mountain's new computer system and the company's approach to improving rental rates.

RER: Do you expect 2004 to be a better year than 2003? Do you expect increased demand from your customer base?

COWING: Red Mountain Machinery forecasts a slightly improved year over 2003 due to an increase in demand, however, the shortage of competitively priced equipment will inhibit us from substantially increasing the size of our rental fleet. Most of the improvement for us in 2004 will likely be caused by upward pressure on rental rates and improved demand for existing equipment.

Did you make any changes in your inventory in 2003?

We adjusted our fleet mix selling off under-utilized assets and increasing rental rates on machines that were not profitable. We are continuing to adjust our rental fleet mix by retiring less profitable machines and replacing them with units that require less hours of maintenance and provide improved cash flow.

What are some of your major concerns? I imagine that in your business, renting heavy equipment, for example, availability of mechanics must be something you have to deal with constantly.

In the heavy equipment rental sector, qualified, talented mechanics are critical. The difficulty in adding quality people is impacting on what types of machines we add to the fleet. For example, some models that traditionally have been a popular tool for earthmoving, and require heavy amounts of labor to keep repaired are being replaced by newer concepts. These concepts consist of units that are not as repair sensitive. Since less labor hours are required to run them in our fleet, we are slowly reducing the higher maintenance machines with the lower maintenance machines, i.e. fewer scrapers and more articulated trucks.

Rates have been a major concern in most of North America over the past few years. Are rates improving for your company? If so, why? Is it a result of changes that you've made in policy or improvements in the market?

We have been able to increase rates on some models due to better information from our computer systems regarding profitability. Our sales force has had to take the approach of either get the rate up or the units will be sold off. Our customers have indicated that they understand the costs of maintaining heavy equipment and have more often than not accepted the increased rental rate.

Are you concerned about growing lead times from manufacturers? Will this be a problem for you in the coming year?

Since we specialize in heavy equipment it will both hinder and help us. It will make it more difficult to obtain newer equipment for our fleet, but it will also make it more difficult for our customers to purchase equipment thus causing an increase in demand for our existing fleet.

During the past few years many companies made changes to operate more efficiently. Did you make any changes to operate more efficiently and how will those changes help you as business improves?

The major change we have made in operations is improved monitoring of our utilization and profit by machine family and model. In addition we replaced our financing methods to more suit our business. Through improved financing costs and terms, along with weeding out the losers, we anticipate much improved results as demand and rates improve.

Also, our organization spent a considerable amount of time and money in 2001 and 2002 in establishing a state-of-the-art computer operating system. In 2003, we improved our ability to mine this data for making better business decisions. In short, the last two years of toughing it out forced us to improve our systems and become a much better managed company. This has been accomplished by raising the bar for both our personnel and our systems.

A Small Step Upward

After a 6 percent drop from 2001 to 2002, the RER 100's 2003 total rental revenue increased year over year from 2002, but not by enough to get excited about. From $8.86 billion to $8.98 billion (or $8,982.1 to be a bit more precise), the 2004 RER 100 registered a year-over-year increase of about 1.3 percent.

Falling just shy of $9 billion, the 2003 RER 100's total rental revenue was the second highest in history.

Year Total Rental Volume (in billions) % Change 2003 $8.98 +1 2002 $8.86 -6 2001 $9.41 +7 2000 $8.79 +25 1999 $7.01 +59 1998 $4.41 -1 1997 $4.45 —

RER 100 Fast Fact: Several years ago, the race to add branches was on and expansion was the order of the day. The 2003 results show 39 percent of 2004 listees with the same number of branches as the year before; 30 percent decreased their number of branches, and 19 percent increased.

The Caterpillar 100?

Not quite, but once again, Caterpillar dealerships with their Cat Rental Stores are playing a growing role on the RER 100, with 24 of 100 companies being rental extensions of Caterpillar dealerships. With 1,387 rental branches worldwide, Caterpillar is now the largest rental company in the world. With 379 Cat rental branches in North America, Caterpillar ranks only behind Home Depot, United Rentals and Rental Service Corp., in terms of total branches. If only the Cat dealers on the RER 100 were included, Cat would rank No. 4 on this year's RER 100. With about 40 more Cat dealerships not listed, Cat Rental probably ranks No. 2 in rental volume in the North American rental industry.

Company Rental Revenue Locations (rank in parenthesis) (in millions) Finning (16) $86.4 25 Holt Cat Rental (18) $55.0 21 Wagner Rents (21) $45.2* 15 Battlefield Equipment Rentals (22) $44.6 33 Empire Machinery (23) $44.0* 10 Ring Rents (27) $38.0* 12 Holt of California (29) $34.3* 6 Ohio Cat (30) $34.1* 8 Mustang Rental Services (32) $32.7 8 Cashman Equipment (33) $32.5* 5 Louisiana Rents (34) $32.0 6 Kelly Tractor(35) $31.5* 10 Hawthorne Rent-It Services (41) $27.0 10 Machinery Power & Equipment (46) $24.0* 9 Yancey Bros.(49) $23.5* 13 Gregory Poole Equipment(53) $20.9 4 Puckett Rents (58) $19.4 9 Location Hewitt (59) $19.0* 11 Peterson Rents (61) $18.0 6 North Central Rental & Leasing (63) $17.8 18 Patten Industries (64) $16.7 6 Stowers Machinery (70) $14.2 6 Americon (13) $13.4* 8 Blanchard Machinery (84) $9.1 5 Total $733.3* 264

Asterisk denotes RER estimate.

Top 10: Let's Call It Flat

In last year's chart, covering 2002 revenue, the top 10 declined for the first time since the recession-wracked year of 1991. This year, covering 2003 revenue, it declined again, although since the decrease is a statistically insignificant less than half of a percent, the number is essentially flat year over year. Five of this year's top 10 increased rental revenue in 2004; five decreased.

Year Rental Revenue (in billions) % Change 2003 $6.43 -0.5 2002 $6.46 -6 2001 $6.89 +6 2000 $6.49 +32 1999 $4.94 +56 1998 $3.16 +36 1997 $2.32 +55 1996 $1.50 +25 1995 $1.20 +20 1994 $998.4 million +25 1993 $799.0 million +11 1992 $718.9 million +1.5 1991 $708.1 million -8 1990 $771.5 million —

RER 100 Fast Fact: 48 percent of 2004 RER 100 listees had revenue increases over the previous year, while 36 percent suffered decreases. Five percent were flat from the previous year and 11 were either first-time or returning listees.

Rentals, Eh?

While United Rentals, Rental Service Corp. and Hertz Equipment Rental Corp. have become major players in the Canadian rental market, Canadian-owned companies are still a major presence on the RER 100. Here are the companies with Canadian ownership, headquartered in Canada:

Company (Rank in parenthesis) Rental Volume (in millions) Total Volume (in millions) Locations Finning (16)
Edmonton, Alberta $86.40 $1,083.90 25 Battlefield Equipment
Rentals (22)
Stoney Creek, Ontario $44.60 $81.90 3 Location Simplex (37)
Montreal, Quebec $31.30 $38.70 28 Wajax (40)
Mississauga, Ontario $29.20 $326.00 31 Stephenson's Rent-All (51)
Mississauga, Ontario $22.00 $27.00 20 Coneco Equipment (55)
Edmonton, Alberta $20.60* n/a 10 Location Hewitt (59)
Pointe-Claire, Quebec $19.00* n/a 11 Atlantic Rentals (67)
Woodstock, New Brunswick $16.10* $28.80* 16 River Valley Equipment (95)
Edmonton, Alberta $7.30 $13.10 2 Strongco (96)
Mississauga, Ontario $6.90 $225.00 5

Alphabetical List With Rank

A&G Associates 94 Admar Supply Co. 65 Aggreko 11 Ahern Rentals 15 AIS Rental Corp. 28 All Star Rents 83 AMECO 12 Americon 73 Anderson Equipment Co. 43 Art's Rental Equipment 48 Atlantic Rentals 67 A Tool Shed 85 Battlefield Equipment Rentals 22 Berry Companies 80 Binder Machinery 97 Blanchard Machinery 84 Briggs Equipment 14 California High Reach 90 Cashman Equipment 33 Cate Equipment Co. 86 Clairemont Equipment 47 CLM Equipment 86 Compresores & Equipos 60 Coneco Equipment 55 Continental Equipment 69 Cowin Equipment Co. 68 Crescent Machinery 81 Diamond Rental 78 Ecco Equipment Corp. 24 Ellen Equipment 93 Empire Machinery 23 Equipment Depot 50 Finning 16 GE Energy Rentals 17 Gregory Poole Equipment 53 H&E Equipment Services 10 Handy Rent-All Center 75 Hawthorne Rent-It Services 41 Hertz Equipment Rental Corp. 3 Holt Cat Rental 18 Holt of California 29 Home Depot Rentals 7 HSS RentX 20 Hugg & Hall Equipment 74 Imperial Crane Services 31 Kelly Tractor 35 Knickerbocker Russell Co. 100 LB Smith 26 Location Hewitt 59 Location Simplex 37 Louisiana Rents 34 Lynn Ladder & Scaffolding 79 Machinery Power & Equipment 46 Maxim Crane 8 MidAtlantic Rents 71 Midwest Aerials & Equipment 77 Modern Group 42 Mustang Rental Services 32 National Lift Truck 86 NationsRent 6 Neff Rentals 9 NES Rentals 5 North Central Rental & Leasing 63 Northridge Equipment Rentals 38 Ohio Cat 30 Patten Industries 64 PDQ Rentals 90 Peterson Rents 61 Pioneer Equipment Rental & Supply 99 Puckett Rents 58 Puerto Rico Wire 57 Rebel Rents 76 Red-D-Arc Welderentals 24 Red Mountain Machinery 66 RentalMax LLC 82 Rental Service Corp. 2 Ring Rents 27 River Valley Equipment 95 Road Machinery Co. 92 Roland Machinery 72 SafeWorks LLC 54 Scott Construction Equipment 52 Southeastern Equipment Co. 56 Star Rentals 36 Stephenson's Rent-All 51 Stowers Machinery 70 Strongco 96 Sunbelt Rentals 4 Sunstate Equipment 13 Temp Air 61 Thompson Pump 43 T-K-O Equipment 86 Topp Portable Air 98 Trico Equipment 39 United Rentals 1 Volvo Rents 19 Waco Scaffolding & Equipment 45 Wagner Rents 21 Wajax 40 Yancey Bros. 49