CHICAGO — National Equipment Services, No. 6 on the RER 100, reported that revenue grew 8 percent to $107.3 million for the first quarter, ended March 31, 2001. Total revenue for the first three months grew 3 percent year over year to $138.8 million.
Operating income fell 55 percent to $7.3 million because of a decline in rental rates in some markets, particularly the Midwest, according to NES.
“As expected, the industry factors that hampered our performance for the latter half of 2000 — some soft markets and the pressure these put on margins — continued to reduce our first quarter results,” said NES CEO Kevin Rodgers. “In addition, we were affected by the seasonality of our traffic business. However, this business is already picking up momentum in the second quarter and is on its way to another strong year.”
NES has said it expects to reduce debt by $100 million and to achieve 15 percent to 17 percent operating margins this year. NES' operating margins for the first quarter fell to 5.2 percent versus 12.1 percent for the same period in 2000.
In other news, the company opened its second remanufacturing facility to expand its ability to rebuild aerial equipment and cranes. The new rebuild center, located in McConnellsburg, Pa., is near the headquarters of aerial manufacturers JLG and Grove.
The facility is 55,000 square feet under roof, slightly larger than NES' first rebuild center in Paducah, Ky. The center features one long production chain, similar to an assembly-line manufacturing process, as opposed to the Paducah facility where machines are worked on separately in specialized bays. Each facility can rebuild about 1,100 machines a year when operating at full capacity.
NES operates190 branches in 36 states.