Essex Crane Rental Reports 18 Percent Revenue Increase

June 16, 2008 • Hyde Park Acquisition Corp. announced that Essex Crane Rental Corp., Buffalo Grove, Ill., has provided Hyde Park with unaudited financial results for Essex's first quarter ended March 31, 2008. As announced in March, Hyde Park entered into a definitive agreement to acquire privately held Essex, for total consideration of $210 million.

Essex's total revenue, which includes revenue from equipment rentals, equipment repair and maintenance and equipment transportation services for the first quarter of 2008 rose 18.5 percent to $17.2 million from $14.5 million in the first quarter of 2007. The increase in revenues was driven primarily by a 29.3-percent increase in equipment rental revenue to $13.9 million for the quarter ended March 31, 2008, from $10.8 million in the quarter ended March 31, 2007.

 

The increase in equipment rental revenue was generated by increases in the utilization rate for Essex's fleet as well as increases in rental rates charged for Essex's equipment. A portion of the increase in rental and utilization rates is attributable to Essex's $21.7 million investment over the last 12 months in new heavier lift cranes to replace older cranes with lighter lift capacity. Essex's new heavier lift cranes generate higher utilization and rental rates than their older, lighter lift predecessors.

 

Rental utilization ratios increased for the first quarter from the same period last year. The total number of actual crane rental days equaled 71.8 percent of the total available days versus 68.1 percent for the comparable quarter in 2007. The average monthly rental revenue rate increased 27.2 percent to $19,163 for the three months ended March 2008 from $15,068 for the three months ended March 2007. The increase in average equipment rental rates reflects both rental rate increases and Essex's continuing efforts to optimize its fleet mix through the purchase of new, heavier lift cranes. The investment in these new heavier lift cranes is being financed in part through the sale of older lighter lift cranes.

 

As a result of the strong revenue growth and the expense control detailed above, rental EBITDA for the three months increased 43.4 percent to $9.2 million from $6.4 million in 2007.