H&E Equipment Services posted fourth quarter 2020 revenues of $315.6 million compared to $348.1 million in the fourth quarter of 2019, a 9.3-percent decrease.
Rental revenues for the fourth quarter were $149.6 million, compared to $176.3 million for the fourth quarter of 2019, a 15.1-percent slide. Adjusted EBITDA decreased 19.8 percent for the fourth quarter to $101.6 million compared to $126.8 million in the fourth quarter of 2019, yielding a margin of 32.2 percent of revenues compared to 36.4 percent in the year-ago quarter.
New equipment sales were $55.1 million in Q4, compared to $61.4 million a year ago, a 10.3-percent drop. Used equipment sales increased 13 percent to $47.9 million compared to $42.4 million a year ago.
Average time utilization (based on original equipment cost) was 65.4 percent compared to 69.0 percent a year ago. The size of the company’s rental fleet based on original acquisition cost decreased 9.2 percent from a year ago, to $1.8 billion. Average rental rates decreased 4.5 percent compared to a year ago and declined 0.3 percent sequentially, based on ARA guidelines. Dollar utilization was 33.5 percent in the fourth quarter of 2020 compared to 36.0 percent a year ago.
Average rental fleet age at December 31, 2020, was 40.9 months compared to an industry average age of 51.7 months.
“Our fourth quarter performance reaffirmed our beliefs regarding the ongoing improvement in our business,” said Brad Barber H&E Equipment Services CEO. “Demand in our end-user rental markets remained good and physical utilization increased sequentially from the third quarter. Our distribution business also delivered better-than-expected results. We are encouraged with the current trends and visibility as we move into 2021.
“In terms of our financial highlights for the quarter, total revenues were down 9.3 percent, or $32.5 million, compared to a year ago. Adjusted EBITDA decreased 19.8 percent, or $25.2 million, from a year ago, and margins were down 420 basis points to 32.2 percent. While our revenues remain below pre-pandemic levels, we were pleased that the year-over-year declines improved. We also generated significant free cash flow again this quarter.
“With our successful upsized notes offering during the fourth quarter, our balance sheet is strong and will certainly support the acceleration of the growth initiatives we outlined last quarter. From an organic perspective, we are significantly increasing the number of warm starts across our footprint to improve our density in high-growth regions. Additional growth is expected from tuck-in acquisitions of general rental businesses. We are also focused on entering the specialty rental business with opportunities that would be synergistic with our current lines of business and fleet mix. Throughout our 60 years in business, we have always been about equipment solutions, strategically growing our product lines and the ability to serve an increasing base of customers. We are ramping up this commitment in 2021.”
Total revenue for the full year was $1,169.1 million compared to $1,348.4 million in 2019, a 13.3-percent decline. Equipment rental revenue for 2020 was $662.9 million compared to $766.4 million for 2019, a 14.8-percent drop.
Sales of used equipment was the one revenue area that showed an uptick in 2020, climbing from $139.3 million in 2019 to $153.1 million in 2020, a 9.9-percent jump. Service revenues came pretty close, at $64.3 million compared to $67.9 million in 2019, a 5.4-percent decrease.
Based in Baton Rouge, La., H&E Equipment Services is No. 7 on the RER 100.
