Nesco Rentals 4643 Crop M

Nesco Specialty Rentals Boosts Revenue 7.8 Percent in Fourth Quarter

March 11, 2021
Nesco Holdings posted $83.3 million in revenue in the fourth quarter of 2020 compared to $77.2 million in the fourth quarter of 2019, a 7.8-percent increase.

Nesco Holdings posted $83.3 million in revenue in the fourth quarter of 2020 compared to $77.2 million in the fourth quarter of 2019, a 7.8-percent increase. Rental revenue decreased 5.1 percent in the fourth quarter, dropping to $51.4 million compared to $54.1 million in the fourth quarter of 2019.

While rental revenue dropped in the fourth quarter, all sales segments increased. Sales of rental equipment was $11.9 million compared to $8.6 million, a 38.9-percent jump. Sales of new equipment more than doubled, from $2.2 million in Q419 to $6.1 million in Q420. Parts sales and services also increased to $13.9 million compared to $12.3 million in the year-ago quarter, a 12.8-percent hike.

For the full year, total revenue was $302.7 million compared to $264 million in 2019, a 14.7-percent increase. Rental revenue totaled $195.5 in 2020, compared to $198 million in 2019, a 1.3-percent decrease.

In the fourth quarter, the Equipment Rental & Sales segment revenue increased 7.3 percent to $65.2 million. The Parts, Tools and Accessories segment revenue jumped 9.6 percent to $18 million. Adjusted EBITDA decreased 9.2 percent to $32.3 million. Free cash flow increased to $28.5 million compared to negative $2.6 million in the fourth quarter of 2019.

For the full year, the Equipment Rental and Sales segment revenue increased 9.1 percent to $236.6 million, while the Parts, Tools and Accessories (PTA) segment revenue increased 40.1 percent to $66.2 million.

Nesco had available liquidity of $93.6 million as of December 31, 2020.

"Our positive momentum in the latter part of the third quarter and throughout the fourth quarter helped us achieve record quarterly revenue in both our ERS and PTA segments," said Lee Jacobson, Nesco CEO. "The recovery continues to build in 2021 as new project releases gained pace in the second half of January and carried into February. We believe a bright future lies ahead for Nesco, with strong, multi-year tailwinds in our end markets and countless new opportunities from our strategic combination with Custom Truck."

"During the fourth quarter, we continued to capitalize on improving demand across all of our end markets, maintaining disciplined cost control and capital investments, and driving free cash flow," said Josh Boone, chief financial officer of Nesco. "We were successful on all these fronts in the fourth quarter, generating positive free cash flow for the third consecutive quarter and the full year, while improving our liquidity position, to nearly $94 million at year-end."

As previously announced, on December 3, 2020, Nesco entered into a definitive agreement to acquire Custom Truck One Source LP. The combination will create a leading, one-stop shop for specialty rental equipment serving highly attractive and growing infrastructure end markets, including transmission and distribution, telecom, rail and other national infrastructure initiatives. Because of complementary business lines, customer bases and capabilities, the combined specialty equipment platform is expected to yield significant benefits from increased scale, broader product and service offerings and expanded geographic coverage with a combined fleet of 8,800 specialty equipment rental units and more than $1.3 billion original equipment cost. The transaction has been approved by Nesco Holdings' shareholders and is on track to close in the first quarter of 2021.

Nesco Specialty Rentals, based in Fort Wayne, Ind., is No. 17 on the RER 100.