Rermag 11814 Herc Rentals 1 2
Rermag 11814 Herc Rentals 1 2
Rermag 11814 Herc Rentals 1 2
Rermag 11814 Herc Rentals 1 2
Rermag 11814 Herc Rentals 1 2

Herc Hikes Third Quarter Rental Revenue 2.7 Percent

Oct. 23, 2019
Herc Rentals reported third quarter equipment rental revenue of $459.6 million compared to $449 million in the third quarter of 2018, a 2.7-percent increase.

Herc Rentals reported third quarter equipment rental revenue of $459.6 million compared to $449 million in the third quarter of 2018, a 2.7-percent increase. Total revenue was $508.1 million compared to $516.2 million in the year-ago quarter, a 1.6-percent decrease. Herc reported net income of $9.4 million, or $0.32 per diluted share in the third quarter, compared to $46.2 million, or $1.60 per diluted share, in the third quarter of 2018.

Third quarter adjusted net income was $43.2 million, compared to $36.7 million in the year-ago period.

Average fleet at original equipment cost was up 0.4 percent and overall pricing improved 4.5 percent in the quarter, compared to the same period in 2018. Adjusted EBITDA increased 3.9 percent to $209.4 million in the third quarter compared to $201.5 million in the third quarter of 2018, a 3.9-percent hike.

“The year-over-year improvement in our third quarter results reflect our continued focus on pricing and quality of earnings,” said Larry Silber, president and CEO. “We improved pricing 4.5 percent and improved adjusted EBITDA margin by 220 basis points compared to the prior year’s third quarter. We have been taking a cautious approach regarding rental equipment expenditures and our balance sheet this year. Our ongoing focus on dollar utilization, along with strong end markets and positive expectations from national and local customers, support our 8 percent to 10 percent adjusted EBITDA growth assumptions for 2019, and form a solid base for improvement in 2020.”

In the third quarter, strong year-over-year improvements in pricing and mix were partially offset by strategic reductions in re-rent revenue, the company said. The decline in total revenue was related to a reduction of $14.7 million in sales of rental equipment and $4.2 million reduction in sales of new equipment, parts and supplies compared to the prior year. Those reductions were partially offset by the increase in equipment rental revenue of $10.6 million.

The 4.5-percent increase in pricing was the company’s 14th consecutive quarter of year-over-year improvement.

Dollar utilization increased 160 basis points to 40.8 percent in the third quarter of 2019 compared to the prior-year period, reflecting improved pricing and customer and fleet mix diversification.

For the first nine months of 2019, equipment rental revenue was $1,244.8 million, compared to $1,210.6 million in the first nine months of 2018, a 2.8-percent increase. The $34.2 million improvement was primarily related to better pricing and mix and partially offset by strategic reductions in re-rent revenue, Herc said.

Total revenue for the first nine months were $1,458.9 million compared to $1,433 million in 2018, a 1.8-percent increase, related to the increase in equipment rental revenue, partially offset by a decline in sales of rental equipment of $3.8 million, and lower sales of new equipment, parts and supplies, and service and other revenue. Pricing increased 4.3 percent in the nine months compared to the first nine months of 2018.

Herc Rentals, based in Bonita Springs, Fla., is No. 3 on the RER 100.