Custom Truck One Source First Quarter Increases on Rental Demand
Custom Truck One Source posted total quarterly revenue of $366.5 million in the first quarter of 2022, driven primarily by strong rental demand. CTOS was acquired by Nesco Holdings on April 1, 2021 and CTOS and Nesco have continued doing business with the CTOS name. CTOS posted $119.1 million in first quarter 2022 rental revenue, compared to $100.2 million in pro-forma rental revenue in the first quarter of 2021 when CTOS and Nesco operated separately, an 8.9-percent year-over-year increase. The combined companies reported $114.1 million in fourth quarter 2021.
During the quarter, Custom Truck One Source closed on the acquisition of HiRail Leasing Group, a leader in rental equipment for the Canadian rail market, for approximately $51.6 million, including $5.6 million in fleet-related purchase price adjustments.
The first quarter rental revenue increased because of improved rental equipment utilization and steady rental yield.
Management said first quarter total rental revenue declined 4.4 percent from Q421 as a result of customary seasonal slowdowns in infrastructure projects. However, the 8.9 percent improvement compared to the pro-forma Q121 results reflects CTOS’ continued expansion of its rental fleet and pricing gains.
The company’s Truck and Equipment Sales segment posted $167.8 million in revenue in first quarter 2022 compared to $177.2 percent in the fourth quarter of 2021 as a result of supply chain challenges related to the segment’s inventory suppliers. Gross profit improved by 1.8 percent to $23.8 million in the first quarter of 2022 compared to $23.4 million in the fourth quarter of 2021. TES continues to see strength in product demand as sales order backlog grew by 42.4 percent compared to the end of Q421.
Strong results despite headwinds
"I am proud of the efforts of our entire team, who delivered very strong first quarter results despite the continued headwinds stemming from supply chain constraints and inflation," said Fred Ross, CEO of CTOS. "Our first quarter results provide a solid foundation for us to build upon over the balance of the year. As we move into the second year post the transaction, we have largely shifted our efforts away from the integration and toward the optimization of our operations to fully realize the benefits of our scale and our one-stop-shop business model. Custom Truck's commitment to our customers remains unmatched and we are steadfastly focused on meeting continued robust customer demand across all three of our business segments."
Custom Truck One Source, based in Kansas City, Mo., is No. 11 on the new RER 100.
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.