H&E Equipment Services posted $179 million in equipment rental revenues for the second quarter of 2021, compared to $155.8 million for the second quarter of 2020, a 14.9-percent increase. Used equipment sales were $41.4 million, compared to $34 million in the year-ago quarter, a 21.8-percent jump. Total revenue was $315.8 million compared to $278.3 million a year ago, a 13.5-percent leap.
For the first six months of the year, equipment rental revenue was $335.3 million compared to $330.3 million in the first six months of 2020, a 1.5-percent increase. Used equipment revenue was $83.1 million compared to $65.2 million last year, a 27.5-percent hike. Total revenue for the first six months was $594.2 million compared to $564.3 million in the first six months of 2020, a 5.3-percent increase.
Net income was $15.8 million for the second quarter compared to $8.8 million a year ago. Adjusted EBITDA increased 7.4 percent to $102.3 million in the second quarter of 2021 compared to $95.3 million a year ago. New equipment sales increased 13.6 percent to $49.9 million in the second quarter of 2021 compared to $43.9 million a year ago. Gross margin was 35.3 percent compared to 33.1 percent in last year’s second quarter.
Dollar utilization was 35.2 percent in the second quarter of 2021, compared to 29.6 percent a year ago. Average rental fleet age on June 30 was 39.8 months compared to an industry average of 52.1 months.
“Physical utilization of 68.3 percent was 880 basis points ahead of the same quarter in 2020, when worsening economic conditions caused by the onset of the COVID-19 global pandemic drove the metric to its lowest level since 2010,” said H&E’s CEO Brad Barber. “On a sequential basis, our second quarter utilization exceeded the first quarter result by 480 basis points at a time when we grew our fleet by more than 5 percent. The rising demand from customers led to a 1-percent improvement in second quarter rental rates when compared to the preceding quarter, representing the first sequential quarterly improvement since late 2019. With improving utilization, rising rental rates and fleet growth, we are increasingly encouraged by the prospects for our industry as we enter the second half of 2021.
“Customer inquiries addressing current equipment needs remain strong and we expect the elevated demand to persist for the foreseeable future. Key industry indices, which in some cases are near record levels, point to a continuation of project expansion into 2022, especially in the non-residential construction market. Physical utilization of our fleet remains on a favorable trend, closing August 1, 2021, at 71.9 percent, reflecting the increasing demand for our young rental fleet.”
Barber also talked about H&E’s pending sale of its crane business and its strategic plans going forward.
“Our recent disclosure regarding the pending sale of our crane business represents a transformative event for H&E,” noted Barber. “Following the close of the transaction, expected during the fourth quarter of 2021, we expect to fortify our position in the rental equipment business and in turn benefit from a more stable revenue base and margin appreciation while positioning the company to capture incremental opportunities resulting from the highly favorable industry trends. In addition, proceeds from the sale are expected to be utilized in numerous ways, including further growth in our rental fleet, expansion of branch operations and other strategic growth initiatives that should advantageously position H&E for the expected industry expansion. Further steps have been taken in support of our transition to a pure-play equipment rental business. Recently, we reached an agreement to sell two earthmoving distribution branches in Arkansas and plan to start a new rental-only branch in the Greater Little Rock market.”
Based in Baton Rouge, La., H&E Equipment Services is No. 8 on the RER 100.