Herc Q3 Results: Rental Revenue Up 29%

Oct. 27, 2021

Herc Rentals has reported positive financial results for the quarter ended September 30, including a 29.2 percent increase in rental revenue.

Equipment rental revenue was $519.6 million and total revenues were $550.4 million in the third quarter of 2021, compared to $402.3 million and $456.7 million, respectively, for the same period last year. The company reported net income of $72.3 million, or $2.37 per diluted share, in the third quarter of 2021, compared to $39.9 million, or $1.35 per diluted share, in the same 2020 period. Third quarter 2021 adjusted net income was $72.7 million, or $2.38 per diluted share, compared to $39.8 million, or $1.35 per diluted share, in 2020.

"Our third quarter performance illustrates how Herc Rentals is shifting into high gear to capitalize on the benefits of operating leverage and scale that we discussed at our Investor Day," said Larry Silber, president and CEO. "We achieved another record for total revenues and adjusted EBITDA in the third quarter of 2021. Total revenues increased 21 percent and adjusted EBITDA grew 25 percent compared to the same period last year. Dollar utilization was also a record 46 percent, enhanced by steady demand in our markets and a positive operating environment. Our long term strategy is driving results and we are positioned for a record year in 2021."

Herc Q3 highlights

  • Equipment rental revenue increased 29.2 percent to $519.6 million compared to $402.3 million in the prior-year period.
  • Total revenues increased 20.5 percent to $550.4 million compared to $456.7 million in the prior-year period. The year-over-year increase of $93.7 million was related primarily to an increase in equipment rental revenue of $117.3 million, partially offset by a decrease of $28.7 million in sales of rental equipment.
  • Pricing increased 2.8 percent compared to the same period in 2020.
  • Dollar utilization increased to 46 percent compared to 37.6 percent in the prior-year period.
  • Direct operating expenses (DOE) of $225.9 million increased 33.4 percent compared to the prior-year period. The $56.5 million increase was primarily due to higher personnel-related costs, and increases related to higher year-over-year volume such as delivery and freight, maintenance, and re-rent expense.
  • Selling, general and administrative expenses (SG&A) increased 33.6 percent to $81.5 million compared to $61.0 million in the prior-year period. The $20.5 million increase was primarily attributed to increases in selling expenses, including commissions and bonus incentives, and travel expenses as business travel returned to pre-pandemic levels.
  • Interest expense decreased to $21.4 million compared to $22.4 million in the prior-year period. The decrease was primarily related to both lower interest rates and balances of the company's ABL Credit Facility in 2021.
  • The income tax provision was $23.8 million compared to $11.7 million for the prior-year period. The increase was driven primarily by the level of pre-tax income.
  • The company reported net income of $72.3 million compared to $39.9 million in the prior-year period. Adjusted net income was $72.7 million compared to $39.8 million in the prior-year period.
  • Adjusted EBITDA increased 25.0 percent to $245.9 million compared to $196.7 million in the prior-year period.
  • Adjusted EBITDA margin increased 160 basis points to 44.7 percent compared to 43.1 percent in the prior-year period.

Source: Herc Rentals

Frank Raczon, Construction Equipment
Mark Pentz, Calvin Group/IEDA
Mark Pentz, Calvin Group/IEDA
Mark Pentz, Calvin Group/IEDA
Mark Pentz, Calvin Group/IEDA
Mark Pentz, Calvin Group/IEDA
ID 9194607 © Arak7 | Dreamstime.com
ID 9194607 © Arak7 | Dreamstime.com