H&E Equipment Services posted a 17.6-percent increase in rental revenues in the first quarter of 2015, with $101.4 million, compared to $86.2 million in the first quarter a year ago. Total revenues declined 4 percent from $237.2 million a year ago to $227.4 million in the recently concluded quarter. Net income decreased from $7.4 million a year ago to $6.1 million this year.
EBITDA increased 10.5 percent to $69.3 million compared to $62.7 million a year ago. Average time utilization based on original equipment cost was 67.5 percent compared to 69.2 percent a year ago. Average rental rates increased 3 percent compared to a year ago.
H&E significantly updated its rental fleet with the average rental fleet age on March 31, 2015 was 32.5 months compared to an industry average age of 43.3 months.
“Overall, the first quarter approximated our expectations as we anticipated a challenging first quarter in certain areas of our business due to normal seasonality, extreme winter weather in many of our regions and the sharp decline in the oil and gas markets,” said John Engquist, H&E Equipment Services CEO. “Demand for rental equipment remained strong despite significant weather headwinds, with revenue increasing 17.6 percent from a year ago. Certain market indicators continue to validate an accelerating recovery in the commercial construction markets in spite of the ongoing weakness in the oil and gas industries. As we cautioned on our fourth quarter earnings call, a decline in new equipment sales, specifically cranes, was expected due to decreased oil and gas activities.
“While we did experience some decline in rental demand due to the softness in the oil patch, increased commercial construction activity in other markets helped mitigate the decreased activity and our strong fleet management systems and transferrable fleet mix allowed us to quickly and efficiently redeploy portions of our fleet into other regions.”
Engquist added that healthy momentum in the commercial construction markets and significant industrial expansion in Louisiana and Texas will drive further growth in 2015, especially in the back half of the year. He said H&E expects revenues in the range from $1.065 billion to $1.088 billion and EBITDA in the range of $334 million to $352 million in 2015.
Based in Baton Rouge, La., H&E Equipment Services is No. 8 on the RER 100.