GREENWICH, Conn. - United Rentals became the first company to top the $1 billion rental revenue mark with $1.58 billion in 1999 rental revenue, and $2.23 billion in total revenue, company officials said, an 82 percent increase from 1998.
United's Q4 1999 revenues were $669 million, $469 million from rentals. Same-store growth was 18.1 percent for Q4 and 22.1 percent for the year. Net income for the year was $153.4 million, and earnings were $1.65 per diluted share, a 65 percent increase from 1998. Dollar utilization for Q4 was a record 63.5 percent, according to vice chairman and chief operations officer Wayland Hicks.
Hicks also announced significant increases in United's national accounts program with $89 million in revenue from national accounts, and more than $175 million projected for 2000. Hicks said the number of national accounts increased from 203 to 562 in 1999 and the average revenue per account more than doubled.
United chairman and CEO Brad Jacobs said $47 million in the fourth quarter - about 10 percent of rental revenue - came from sharing equipment among branches, a sign that the company is reaping the benefits of consolidation (see story at left).
Shares of United Rentals, NationsRent, NES, Neff and Hertz were all trading at half - and in some cases one-third - their 52-week highs as of late March.
GREENWICH, Conn. - United Rentals is reaping the benefits of consolidation by reducing its vendors and cutting costs in equipment purchases and other services, chairman and CEO Brad Jacobs told RER. The cost-cutting should save the company $150 million this year, Jacobs said.
In equipment purchases, United has chosen its preferred vendors in several equipment categories. In air compressors, United went from seven suppliers to one, now buying almost exclusively from Sullair. United reduced its skid-steer loader vendors from 12 to two, now dividing business between Bobcat and Skat Trak. In mini-excavators, United went from 12 to three - Bobcat, Scat Trak and Takeuchi.
In the ride-on compaction categories, United reduced from eight suppliers to one - Bomag. The company went from 11 to four in reach forklifts, signing with Skat Trak, Gradall, Lull and Terex. JLG, Genie and Skyjack will be United's three aerial work platform vendors.
Jacobs added that United plans to reduce its 72 light-equipment supplier base to five and will make final decisions in those categories shortly. And United has reduced its diamond-blade vendor base from 150 to two - Diamond Products and Cushioncut.
United has been able to reduce costs by consolidating its expenditures in other areas as well. Jacobs said the company used 54 travel agents, a service that will now be handled by one agency. And United is working on reducing its office supply vendor base from 46 to one.
United also last month announced 15 acquisitions. In addition to the previously reported acquisitions of RDO Rentals; Burch-Lowe's RentSource division; Nationwide Equipment, a division of SkyReach Equipment; and Oklahoma Shoring and Steel Plate Rental, Oklahoma City, United bought single-location firms Beeline Rentals, Reading, Pa.; Waco Equipment, West Yarmouth, Mass.; Flasher of Kansas, Wichita, Kan.; North Sound Equipment, Bellingham, Wash.; and Tri-State Equipment, Toledo, Ohio.
Additional acquisitions were Brown's Rental Equipment Co., Fort Worth, Texas (four locations); SESCO, Sioux City, Iowa (four locations); Hennessey Equipment, Mills Bay, British Columbia (three locations); Rentals Unlimited, Lebanon, Pa. (two locations); The Dell Brothers, Kingston, Mass. (two locations); and Remsberg Tent Rentals, Frederick, Md. (two locations).
United also has a letter of intent backlog of 18 companies with 27 branches and total revenues of $80 million. It now has 702 locations in 45 states, six Canadian provinces and Mexico.