H&E Equipment Posts 10% Revenue Increase in Q3

H&E Equipment saw a 10 percent revenue increase in Q3, citing improved fleet utilization, rental rate appreciation, and significant progress toward the company’s strategic transition to a pure-play rental business.

Q3 highlights

Revenues in the third quarter of 2021 increased 10.4 percent to $319.4 million compared to $289.3 million in the third quarter of 2020.
Net income in the third quarter was $29.5 million compared to $10.1 million in the third quarter of 2020. The effective income tax rate was 24.8 percent in the third quarter of 2021 and 40.9 percent in the third quarter of 2020.
Adjusted EBITDA in the third quarter of 2021 increased 20.6 percent to $119.1 million compared to $98.8 million in the same quarter of 2020, yielding a margin of 37.3 percent of revenues compared to 34.1 percent in the third quarter of 2020.

Also in Q3, the company agreed to sell its crane business. The results and comparisons above include both discontinued and continuing operations.

“Customer demand for our diverse mix of rental equipment remained vigorous throughout the third quarter as the recovery in non-residential construction intensified, and the increased activity led to another quarter of strong financial performance,” said Brad Barber, CEO. “Among our key metrics, average physical utilization improved to 71.9 percent in the third quarter, decidedly better than averages, when stated on a continuing operations basis, of 63.5 percent and 68.7 percent in the third quarter of 2020 and the second quarter of 2021, respectively.

"Also, as equipment utilization increased, rental rates posted another quarter of sequential improvement, up 2.6 percent from the second quarter while rates advanced 2.9 percent when compared to the third quarter in 2020," Barber said. "By the conclusion of the third quarter, rental rates had improved approximately 450 basis points from the pandemic-induced lows experienced in early 2021. Finally, in the face of global supply chain challenges, we grew our equipment rental fleet by 2.9 percent sequentially and 8.4 percent since the conclusion of 2020.”

Barber remained enthusiastic about the equipment rental industry. “A broadening industrial recovery led by an abundance of non-residential construction activity serves as the underpinning of a truly robust business environment," he said. "Across our rental fleet, physical utilization during October peaked at 75 percent, our best measure since 2018. The strong measure is indicative of outstanding operational execution and continued strong demand as we entered the final quarter of 2021. Industry indicators continue to signal the likelihood for further non-residential project expansion in 2022.”

Source: H&E Equipment