Essex Rental Corp. posted second-quarter equipment rental segment revenues of $14.6 million, a 61.5-percent increase compared to $9.0 million for the same period last year, primarily because of the equipment rental revenue generated by Coast Crane, which the company acquired in November. Coast contributed $4.8 million in rental revenue during the second quarter.
Total revenue for the quarter was $22.3 million, compared with $9 million for the same period a year ago. Equipment rental revenue was $10.2 million, compared with $5.4 million a year ago.
“Essex continues to experience steady growth and stability in its three business segments: equipment rentals, equipment distribution, and parts and service,” said Ron Schad, president and CEO of Essex. “With the exception of our crawler crane fleet, we experienced increases in utilization rates during the second quarter for all of the categories of equipment that we rent. Crawler cranes experienced a slight decline in utilization due to the conclusion of certain levee projects. Excluding these levee-related crawler cranes, we have continued to see a steady increase in utilization on a comparable quarter and year-to-date basis for this asset category.”
Utilization for crawler cranes, measured on a “days” basis, was 38.6 percent for the quarter, compared with 35.1 percent for the year-ago quarter. On a sequential quarter basis, the 38.6 percent was a decline compared to 42.8-percent utilization in the first quarter. The number of crawler cranes on rent excluding those on levee-related projects has increased 5.3 percent since the end of the second quarter, Schad said.
Average monthly crawler crane rental rate decreased by $1,025 to $15,347 for the second quarter, compared with $16,372 for the second quarter last year, a 6.3-percent drop. On a sequential quarter basis, average crawler crane rental rates decreased $169 compared with $15,516 for the first quarter.
“Overall, we are pleased with the business trends that we are seeing at Coast Crane,” said Schad. “The Coast Crane acquisition has enabled us to diversify our earnings and is presenting us with a number of meaningful growth opportunities. The steady increase in rental equipment utilization rates, combined with accelerated revenues in our equipment distribution segment and the predictability of our parts and service segment, provides Essex with a balanced business portfolio that is well positioned for growth as our end markets continue to recover.”
Schad said the company is optimistic about opportunities in the second half of 2011, as the company experiences strong quoting activity related to construction jobs already awarded to contractors. “Based on historical experience, we view the continued increase in our rough terrain and boom truck utilization as a leading indicator that utilization for our crawler cranes will continue to steady improve,” he said. “During the balance of 2011, we will begin to take delivery of approximately $28 million of new equipment. Much of this equipment is in asset classes in which we are enjoying high utilization, and we believe that as it is deployed it will be a catalyst for further revenue growth. While in certain bid situations competitive behavior remains challenging, we believe that in the long term, our strategy of disciplined pricing related to our broad fleet of bare rental cranes and our expanded service, sales and distribution capabilities will provide attractive growth opportunities.”
Schad said Essex will continue to sell older and less utilized pieces of used rental equipment to reposition the company’s rental fleet.
“Our new equipment distribution backlog continues to build and during the third quarter of 2011, we are expecting to achieve a significant sequential increase in revenue compared to the second quarter,” added Schad. “We remain pleased with the decision to broaden our equipment distribution platform by expanding our relationship with certain manufacturers and initiating new relationships with others. As we deploy marketing strategies over the ensuing months for both our new equipment distribution and our parts and service segments, we believe we will continue to grow at an accelerated rate.”
The company also completed the first phase of the installation of information systems at Coast Crane, allowing the combined companies to operate a single ERP system platform.”
Based in Buffalo Grove, Ill., Essex Rental Corp. is No. 61 on the RER 100. Seattle-based Coast Crane is No. 51.