H&E Reports Record Fourth Quarter Results
March 16, 2007 • H&E Equipment Services, Inc., Baton Rouge, La., reported an increase in revenues, income and rental rates for the fourth quarter 2006.
Revenues rose 16.2 percent • up to $215.5 million from $185.5 million last year (in the fourth quarter of 2006). Income from operations increased 35.5 percent to $35.1 million, compared to $25.9 million a year ago, and net income increased 39.5 percent to $20.5 million, compared to net income of $14.7 million last year. Rental rates also increased approximately 3.9 percent.
“Our 2006 financial results are a direct result of strong market demand for our products and services across all our regions,” said John Engquist, H&E Equipment Services' president and chief executive officer. “We ended the year with an excellent quarter with continued strength across all markets and segments. The demand for new equipment, primarily cranes, was exceptionally strong. Even though our year over year comps were challenging, we grew sales, EBITDA and income from operations at exceptional rates.” Engquist later noted that every segment of H&E's business is delivering solid results, attributing the strong growth to nonresidential construction activity.
According to Leslie Magee, H&E's chief financial officer, the company's record fourth-quarter performance was driven by equipment rentals and new equipment sales, which grew approximately 20 percent, and its combined parts and service revenues reflected growth in excess of 10 percent. “Used equipment sales increased approximately 5 percent,” Magee added. “As we saw in the third quarter of 2006, our customers' purchasing trends continued to shift to new equipment versus used equipment as a result of improved availability from many of our manufacturers.”
In 2007, Engquist said that H&E's exposure to the petrochemical sector, energy sector, mining industry and Gulf region hurricane protection and rebuilding efforts should drive increased product and service demands. “We also continue to explore accretive acquisitions and Greenfield opportunities as part of our growth strategy,” he said. “We are, however, experiencing significant supply constraints from our crane suppliers, which are hindering our ability to meet demand and impacting our first quarter expectations. Among other things, our 2007 outlook reflects these supply constraints, although we are hopeful that crane availability will improve throughout the year.”
