Neff Rental Posts 7 Percent Revenue Hike in First Quarter
Neff Corp. posted $95.9 million in first quarter total revenue, compared to $89.6 million in the first quarter of 2016, a 7 percent hike. Rental Revenues increased 5.3 percent year over year to $85.5 million compared to $81.2 million in the first quarter a year ago. Rental rates rose 1 percent year over year in the first quarter of 2017.
Time utilization decreased to 62.9 percent compared to 65.1 percent a year ago. The average original equipment cost of Neff’s rental fleet increased 7 percent year over year to $832.5 million. Net income attributable to Neff Corp. increased to $1.7 million in the first quarter compared to a net loss of $0.2 million in the year-ago frame.
Adjusted EBITDA jumped 5.3 percent to $43.6 million in the first quarter, compared to $41.4 million in Q116. Adjusted EBITDA margin was 45.5 percent compared to 46.2 percent a year ago.
“The first quarter of 2017 was another very good quarter for Neff’s rental business as we generated record first quarter results for rental revenues and EBITDA, each of which increased by 5.3 percent year over year,” said Neff Corp. CEO Graham Hood. “This performance reflects our ability to execute our strategy and take advantage of the ongoing strength in the construction markets we serve. This also provides confirmation to our belief that the cycle remains strong and intact. We expect this strength to continue for the remainder of 2017.”
Return on invested capital was 11.1 percent for the 12 months ended March 31, an increase of 40 basis points from the 12 months ended March 31, 2016. The size of the rental fleet was $841.9 million of OEC as of March 31, 2017, compared to $796.3 million at the end of last year’s first quarter.
Neff reaffirmed its 2017 outlook. It expects total revenue in the range of $400 million to $420 million. It expects adjusted EBITDA in a range of $195 million to $205 million, and year-over-year rental rate change of approximately 0 percent to 1 percent. It forecasts time utilization of about 67 percent. Neff projects net capital expenditures in the range of $85 million to $90 million.
Neff Rental is based in Miami.
About the Author
Michael Roth
Editor
Michael Roth has covered the equipment rental industry full time for RER since 1989 and has served as the magazine’s editor in chief since 1994. He has nearly 30 years experience as a professional journalist. Roth has visited hundreds of rental centers and industry manufacturers, written hundreds of feature stories for RER and thousands of news stories for the magazine and its electronic newsletter RER Reports. Roth has interviewed leading executives for most of the industry’s largest rental companies and manufacturers as well as hundreds of smaller independent companies. He has visited with and reported on rental companies and manufacturers in Europe, Central America and Asia as well as Mexico, Canada and the United States. Roth was co-founder of RER Reports, the industry’s first weekly newsletter, which began as a fax newsletter in 1996, and later became an online newsletter. Roth has spoken at conventions sponsored by the American Rental Association, Associated Equipment Distributors, California Rental Association and other industry events and has spoken before industry groups in several countries. He lives and works in Los Angeles when he’s not traveling to cover industry events.