Herc Rentals posted equipment rental revenue of $377.6 million, up from $369.1 million in the first quarter a year ago, a 2.3-percent increase. However, total revenues of $475.7 million were a 10.3-percent hike compared to $431.3 million in the first quarter last year. The company reported a net loss of $6.7 million, or $0.23 per diluted share compared to a $10.1 million loss ($0.36 per diluted share) in the same period a year ago.
Average fleet at original equipment cost increased 2 percent year over year and overall pricing improved 3.8 percent in the first quarter of 2019 compared to the year-ago period. Adjusted EBITDA increased 7.2 percent to $142.3 million in the first quarter compared to $132.7 million in the same period last year.
“Our strategic initiatives continued to drive profitability in the first quarter,” said Larry Silber, president and CEO. “We improved year-over-year pricing by 3.8 percent in the quarter, our 12th consecutive quarter of year-over-year improvement. Dollar utilization increased to 35.5 percent. Reductions in both direct operating expense and selling, general and administrative expense contributed to strong flow-through and free- cash flow in the first quarter.
“We are seeing improvement in demand for rental equipment in the second quarter consistent with the seasonal ramp up in the spring. Current levels of demand combined with positive industry metrics and our continued execution of revenue and cost initiatives reinforce our confidence for another strong year. Given our current outlook, we are affirming our adjusted EBITDA guidance for the year.”
The company attributed equipment rental revenue increase to strong year-over-year improvement in pricing, partially offset by strategic reductions in re-rents to drive margin improvement.”
Herc said its increase in total revenues was partly the result of a strong used equipment market as it continued to focus on improving equipment mix and reducing fleet age.
Dollar utilization of 35.5 percent in the first quarter of 2019 increased 20 basis points compared to Q118.
"We continue to expect year-over-year growth in adjusted EBITDA of approximately 7 percent to 11 percent in 2019," added Silber. "We are also affirming net fleet capital expenditures for the year. Our expectation for improved adjusted EBITDA and lower net fleet capital expenditures should generate free cash flow to reduce our net leverage by the end of the year."
Based in Bonita Springs, Fla., Herc Rentals is No. 3 on the RER 100.