Essex Crane Announced 2008 Results

April 6, 2009 – Essex Rental Corp., Buffalo, Grove, Ill., announced its results for the fourth quarter and year ended Dec. 31, 2008, for its operating subsidiary, Essex Crane Rental Corp.

Rental revenue for the fourth quarter of 2008 rose 16.9 percent to $15.9 million from $13.6 million for the fourth quarter of 2007. Rental EBITDA for the fourth quarter of 2008 increased 20.4 percent to $11.2 million, from $9.3 million for the quarter ended Dec. 31, 2007. Rental revenue for the year rose 26.6 percent to $61.8 million from $48.8 million.

“We are very pleased with Essex Crane’s results for 2008, which included increased rental revenues and rental EBITDA,” said Ron Schad, president and CEO of Essex Rental and Essex Crane. “We also ended the year in a strong financial position, which included availability under our credit facility of nearly $40 million. In 2008, we experienced well-balanced demand across the end markets that we serve and our financial results benefited from our strategy of transitioning our fleet towards new heavier lift capacity cranes, which generate higher average monthly rental rates and have higher utilization rates than the older lower lift capacity cranes that they are replacing. These heavier lift capacity cranes contribute significantly to our profitability and cash flow from operations.”

Essex Crane’s total rental related revenue for the fourth quarter of 2008, which included revenue from rentals, repairs and maintenance, and transportation services (but excludes used rental equipment sales), rose 10.2 percent to $19.4 million from $17.6 million for the fourth quarter of 2007. This increase in total rental revenue was driven primarily by a 16.9 percent increase in equipment rental revenue to $15.9 million for the three months ended Dec. 31, 2008, from $13.6 million in the comparable quarter in 2007.

In the fourth quarter, Essex Crane invested $2.8 million in new heavier lift cranes, replacing older cranes with lighter lift capacity, which typically have lower utilization and rental rates than the new heavier lift capacity cranes. The rental utilization ratio (using the more conservative "days" method of calculation) remained relatively stable for the quarter.

“During the fourth quarter, the challenging commercial credit environment, economic uncertainty and lower oil prices impacted our customers and new order activity, including downstream power and petrochemical owners, who chose to defer certain maintenance projects,” said Schad. “We believe that our national footprint and the diversity of our end markets will help to mitigate the impact of the sluggish economy. We also expect that our strategy of investing in heavier lift capacity equipment will yield significant future benefits. During the latter portion of the first quarter of 2009, we began to see a pick up in quoting activity that is consistent with levels in the same period last year. In addition, our quoting activity leads us to believe we will realize a benefit beginning in the second half of 2009 from infrastructure projects included in the Federal Stimulus Bill that target highway and heavy bridge construction, civil works programs, and water and wastewater treatment. Alternative energy projects, especially wind energy, are also expected to generate higher level of quoting activity.”

Click the link for complete Essex results.