Total revenues decreased 16.6 percent in the second quarter 2020 for H&E Equipment Services, dropping to $278.3 million from $333.6 million in the second quarter of 2019. Total equipment rental revenues for the second quarter were $155.8 million compared to $192.3 million a year ago, a 19-percent decline. Rental revenues were $140.8 million compared to $173.8 million a year ago, also a 19-percent decrease.
Net income for the second quarter was $8.8 million compared to $22.6 million in the year-ago quarter. Adjusted EBITDA was $95.3 million in Q2, down from $118 million a year ago, a 19.3-percent dip. Revenue margin was 34.2 percent of revenue compared to 35.4 percent in last year’s second quarter. New equipment sales decreased 18.0 percent to $43.9 million in the second quarter compared to $53.6 million a year ago, while used equipment sales only decreased 5.9 percent to $34 million compared to $36.1 million a year ago.
Average time utilization, based on original equipment cost, was 59.5 percent compared to 71.2 percent a year ago. The size of H&E’s rental fleet based on OEC decreased 2.3 percent year over year to $1.9 billion. Average rental rates dropped 2.8 percent compared to a year ago and declined 2.8 percent sequentially based on ARA guidelines.
Dollar utilization was 29.6 percent in the second quarter compared to 36.5 percent a year ago. Average rental fleet age was 39.1 months compared to an industry average of 49.7 months, H&E reported.
“As a result of the COVID-19 outbreak and subsequent economic slowdown, the second quarter was a challenging period for our business,” said Brad Barber, H&E Equipment Services’ CEO and president. “Work continued in our end-user markets while some projects were paused, delayed or cancelled. As we expected, demand for rental equipment declined which pressured rates, physical utilization and ultimately rental revenue. Utilization bottomed in April; subsequently utilization improved and stabilized with increased levels of activity in our end-user markets.
“Recently, there are some encouraging trends compared to the second quarter; however, we believe the headwinds related to COVID-19 will persist throughout the balance of this year. There is still tremendous uncertainty regarding the cadence of the economic recovery, including the outlook for the non-residential construction markets. We are working very hard to generate returns for our shareholders in the current environment and I am very pleased with how our team has responded to these significant marketplace challenges.”
For the first six months of 2020, total revenues were $564.3 million compared to $647.2 million for the first six months of 2019, a 12.8-percent decline. Rental revenues dropped from $368.4 million in the first six months of 2019 to $330.3 in 2020, a 10.3-percent decrease. Declines were less for the six months as the pandemic shutdown began to take effect in mid-March. New equipment sales were $74.8 million for the six-month period compared to $112.7 million in 2019, a 33.6-percent decrease. Used equipment sales were basically flat year over year, declining from $65.7 million to $65.2 million. Service revenues actually increased for the six-month period, from $32.3 million to $33.5. Part sales dropped from $62.3 million to $56 million.
Based in Baton Rouge, La., H&E Equipment Services is No. 7 on the RER 100.
