With its successful acquisition of J.W. Burress, Baton Rouge, Louisiana-based H&E Equipment Services has moved into the mid-Atlantic region with 12 locations in Maryland, Virginia and the Carolinas. The ownership and management of J.W. Burress and H&E Equipment Services have known each other for over 25 years, assisting one another to satisfy customer demands for equipment needs on several projects. According to H&E Equipment Services President and CEO John Engquist and Brad Barber, executive vice president and general manager, this strategic move is part of a long-range plan for continued solid growth.
What factors in the economy and in the industry made you decide to take this step?
John Engquist: The mid-Atlantic region is a great equipment market year-in and year-out. The acquisition of J.W. Burress gives us contiguous expansion throughout the mid-Atlantic region, which is very attractive to us. Burress is a fine company with a great reputation in this marketplace, so it's really an ideal acquisition. It's a great market that we think is going to afford us a lot of opportunities for the business.
What is H&E Equipment Services bringing to the region?
John Engquist: I think what we bring is our business model. We're one of the largest distributors in the country, and we're also one of the top rental companies in the country. We operate both under one roof, so we're an integrated business model. In that respect I don't think that there's an equipment company quite like H&E Equipment Services in the mid-Atlantic region. I think we're going to be able to offer a lot to the equipment end users in this market.
Brad Barber: We are also going to diversify some of the products we offer. We have recently signed a contract to distribute Link-Belt earthmoving products throughout the majority of the Burress footprint. With existing manufacturers we will enhance their position in the market through rentals and additional retail focus. We're currently negotiating with manufacturers of product types not currently offered by Burress such as skid steers, backhoe loaders and mini excavators. These are types of products that Burress had not offered, so it's a significant opportunity in that region.
We're also going to expand the rental side of the business. At H&E Equipment Services we generally have three types of salespeople. One type of salesperson sells parts and service for both our products and competitive products. The second type of salesperson is focused heavily on retail. They are paid on sales of products both from our fleet and from new sales directly from the manufacturer. The third type of salesperson, which did not exist at Burress but will in short order, is a rental salesperson. They are focused on and compensated for rental only. They are looking for rental opportunities on job sites. This will be a significant change in the business and a significant portion of our revenue.
When we talk about other capabilities we bring, our information systems are far superior to anything they have had in the past. Our ability to manage our inventories, our marketing strategy, our proprietary customer relations management software we have — all of these things did not exist previously in the Burress organization.
Where does H&E Equipment Services plan to be in five years?
John Engquist: I think what you're going to see from us over the next five years is continued solid growth. We're going to be conservative in our growth from an acquisition standpoint, but we're going to be opportunistic. I think we have an extremely strong balance sheet. We're certainly going to take advantage of acquisition opportunities as they come up, and we'll continue to grow our business through green field startups. It's something we've been very successful at and we'll continue to pursue. You'll see sustained, solid growth from us going forward.
Editor's note: Responses have been edited for clarity.