RSC Reports Continued Growth in Second Quarter
July 26, 2007 • Scottsdale, Ariz.-based RSC Holdings Inc. announced results yesterday for the second quarter of 2007. Total revenues were $442.8 million and net income was $17.4 million, or $0.18 per diluted share. Excluding fees related to the termination of the monitoring agreement and debt prepayment costs in connection with the recent initial public offering, net income would have been $35.5 million, or $0.36 per diluted share.
“This represents our 16th consecutive quarter of rental revenue growth,” said Erik Olsson, president and CEO of RSC. “I am very pleased with how the company continues to perform and expand its margins. We are executing our strategy of emphasizing our core rental operations through customer service, same store growth and investment in local markets, and have further strengthened our market position with year-to-date additions of 12 locations and 55 sales people.”
Rental revenues, which make up 87 percent of total revenues, grew 13.1 percent or $44.5 million to $384.6 million in the second quarter compared to $340.1 million in the prior period. This growth includes another quarter of strong same store rental revenue growth of 10.9 percent and the addition of eight new locations. Sales of used equipment decreased $12.4 million and sales of merchandise decreased $3.1 million in the second quarter in line with the company's strategic direction. Total revenues for the second quarter were $442.8 million compared to $413.8 million in the prior period, an increase of $29 million or 7 percent.
Adjusted EBITDA increased to $206.3 million in the second quarter compared to $182.9 million in the prior period, an increase of 12.8 percent. Adjusted EBITDA margin increased to 46.6 percent in the second quarter compared to 44.2 percent in the prior period.
Second quarter operating income of $100.9 million and net income of $17.4 million, or $0.18 per diluted share, include $20 million of fees related to the termination of the monitoring agreement, $4.6 million of prepayment penalty and the write-off of $5 million of deferred financing costs associated with the debt that was repaid in connection with the company's recent initial public offering. Excluding these items, operating income would have been $120.9 million, increasing to 27.3 percent of total revenues from 26.7 percent in the prior period. Net income would have been $35.5 million, or $0.36 per diluted share compared to $49.7 million, or $0.15 per diluted share ($0.50 per diluted share on a pro forma share basis) in the prior period.
Through June 30, 2007, the company reduced total debt by $260 million to $2.7 billion. Free cash flow for the second quarter was $32.5 million compared to $6.4 million in the prior period.
The near term demand from the non-residential and industrial sectors is expected to continue at current high levels. As a consequence, the company anticipates the range of full year 2007 results for total revenues of $1.78 billion to $1.81 billion, net income per diluted share of $1.18 to $1.32 and adjusted EBITDA of $810 to $830 million. Excluding the items discussed above, adjusted net income per diluted share is expected to be $1.36 to $1.50 per diluted share.
