First-quarter revenues for H&E Equipment Services dropped 24.2 percent to $186.2 million compared with $245.8 million a year ago, while rental revenues plunged 22.1 percent to $55.5 million for the quarter, compared with $71.2 million in the first quarter of 2008. EBITDA dropped 32.5 percent to $38.1 million — a 20.4-percent margin — compared to $56.4 million in the year-ago quarter, a 22.9-percent margin.
Income from operations decreased 57.6 percent to $11.1 million compared with $26.2 million a year ago. Net income was $2.2 million, 6 cents per diluted share, compared to $10.2 million or 28 cents per share in the year-ago period.
“The challenging environment remained very weak during the first quarter, but despite those challenging conditions, H&E Equipment generated profits,” said John Engquist, H&E president and CEO. “We achieved significant progress during the quarter to scale our business and to adapt to the current market conditions, including a 16.1-percent decrease in selling, general and administrative costs compared to a year ago. We continue to downsize our fleet and operations based on current demand and the anticipation that the environment persists for the reminder of the year. The first quarter is historically our softest period of the year. In view of seasonality, combined with the substantial economic pressure, we are pleased with our performance.”
Engquist pointed out the economy is a severe challenge to H&E’s customer base. “Some indicators are predicting an improvement in lending and economic conditions later this year,” he said. “We are hopeful this will indeed occur and translate into construction dollars beginning to flow once again. Our focus on the industrial sector has and continues to be beneficial to our business, but no industry is proving immune to the current economy. Until a recovery begins, we remain focused on managing our assets and cash generation.”
H&E faced severe price pressure in the first quarter, its rental rates decreasing 9.9 percent. The company reduced rental fleet spending to result in negative net rental cap-ex, and reduced workforce an additional 3 percent in the first quarter, with a similar reduction early in the second quarter.
“As a result, our liquidity remains strong with $244 million availability under our senior secured credit facility,” said chief financial offer Leslie Magee.
Time utilization decreased to 56.1 percent compared with 64.5 percent in last year’s first quarter.
Based in Baton Rouge, H&E Equipment Services is No. 9 on the new RER 100.
