Nesco Specialty Rentals a leading provider of specialty rental equipment to the electric utility, telecom, and rail infrastructure recently reported a 7.2-percent revenue increase in 2019 compared to 2018. Equipment rental revenue was $182.7 million, a 5.5-percent hike compared to 2017. Parts, tools and accessories revenue, which also included rental revenue, was $47.2 million, a 64.8-percent leap compared to 2018, and bringing the company’s total rental revenue to $198 million compared to $184.6 million in 2018, a 7.3-percent increase.
"The fourth quarter capped off another year of solid growth for Nesco,” said Nesco CEO Lee Jacobson. “Our core specialty rental equipment remains in high demand in each of our end-markets, as evidenced by more than 8 percent year-over-year equipment rental revenue growth in the fourth quarter, excluding the impact from Truck Utilities and another quarter of record equipment on rent, which is also up more than 8 percent year-over-year in the fourth quarter. Parts, tools and accessories segment revenue increased more than 70 percent on a year-over-year basis in the fourth quarter, excluding Truck Utilities, driven by a combination of new regional locations and increased spend within our equipment rental customer base.
"Demand within our core electrical transmission and distribution, telecom and rail end markets remain robust. Our largest contractor customers reported another quarter of record, or near record, revenue backlogs in our core end markets and our average customer rental contract period exceeded 13 months for most of 2019, a record for Nesco. Looking ahead, we expect 2020 will be a period of strong growth for our business. Our recent investment in new fleet will allow us to capture many previously lost rental opportunities due to equipment availability. We will also benefit from the investment we made in expanding our parts, tools and accessories service locations from two to seven in 2019 and one additional expected in 2020; and a full year of contribution from the Truck Utilities acquisition. We plan to take a measured approach toward capital spending in 2020 in order to generate positive free cash flow, reduce leverage and focus on maintaining high fleet utilization."
The company reported a net loss in 2019 of $27.1 million, compared to a net loss of $15.5 million for the same period in 2018. The year-over-year increase in net loss was primarily driven by a $13.3 million increase in deal-related transaction and business acquisition expenses.
Adjusted EBITDA was $127.5 million, a 4.8-percent year-over-year increase.
Equipment rental revenue in the “Equipment Rental & Sales” segment increased 5.5 percent to $182.7 million, primarily because of a 6.1 percent increase in average equipment on rent, which grew to $477.5 million in 2019, compared to $450.2 million in 2018. Fleet utilization was 80.7 percent in 2019, compared to 82.3 percent in 2018. After adjusting for new units that have not yet entered into service, Truck Utilities and the prior year's benefit from storm recovery in Puerto Rico, utilization was down 0.4 percent year-over-year. Equipment sales revenue of $34.1 million was a reduction from the prior year of $10.3 million or 23.2 percent leading to an overall decline in ERS revenue for the year.
Nesco is headquartered in Fort Wayne, Ind., and is No. 18 on the RER 100.
