Total revenues declined 2.8 percent in 2013 for Essex Rental Corp., from $98.3 million in 2012 to $95.5 percent in 2013. Rental revenues were essentially flat at $46.6 million compared to $46.5 million in 2012. Adjusted EBITDA before non-cash compensation and non-recurring expenses increased by 6.5 percent to $18.3 million for 2013, compared to $17.2 million in 2012.
The fourth quarter, however, ended the year softly, with segment revenues of $15.2 million, compared to $16.6 million in 2012, an 8.4-percent slide. The decrease is primarily driven by a decrease in rental revenue and a $900,000 decrease in transportation revenues, offset by a $1.1 million increased in used rental equipment sales. The decrease in equipment rental revenue was driven by a drop in utilization for rough-terrain, large tower crane and crawler cranes, partially offset by an increase in utilization of self-erecting tower cranes from 41.6 percent in Q412 to 48.7 percent in the recently concluded frame.
Average rental rates for the hydraulic crawler crane fleet increased by an average of $1,094 or 4.3 percent for the fourth quarter, compared to Q412.
“Despite year-to-date EBITDA within our updated guidance, we are disappointed at how the year ended in 2013,” said recently named president and CEO Nick Matthews. “While we anticipated the sequential softening in utilization levels and earnings in the fourth quarter due to seasonality, the residual effects of the soft third quarter are shown in our results.
“We are encouraged by the improvement in our retail distribution line. The growth of this segment provides opportunities that should enhance future earnings of our other segments, and also strengthens the relationships we have with our key suppliers. We feel that with our current distribution agreements in place, we are well-positioned to take advantage of the recovering end markets.”
Matthews said Essex sold seven traditional crawler cranes in the fourth quarter of 2013 and listed several others in a sealed bit auction.
Matthews expressed confidence in the company’s 2014 prospects, saying that early 2013 indicators are encouraging. However, he added the company does not project significant revenue increases.
Based in Buffalo Grove, Ill., Essex Crane Rental is No. 44 on the RER 100.