RSC's Rental Revenues Up
April 28, 2008 • RSC Holdings Inc., Scottsdale, Ariz., announced its first quarter 2008 rental revenues are up 7 percent from last year's first quarter, growing from $348 million to $372.3 million. Same store rental revenue growth was 4.6 percent for the quarter and rental rates were 0.4 percent lower on a year-over-year basis.
The company reports used equipment sales were $31.4 million, down from $37.8 million in the first quarter of 2007, as the company deliberately slowed this sales activity to reduce capital expenditures in the current market environment and take advantage of its fleet, which averaged 28 months at the end of the quarter.
Utilization of fleet was 68.6 percent in the quarter, compared to 70.3 percent a year ago as the company held its fleet for the seasonal upturn. Sales of merchandise were $18.4 million compared to $20.6 million in the prior year. Total revenues were $422.1 million, up 3.9 percent from the $406.3 million reported for the year-ago period.
“We are pleased with our solid rental revenue growth in what is the toughest quarter of the year,” said Erik Olsson, president and chief executive officer. “The non-residential market continued to grow in the first quarter, and we continue to increase our share of this market. We are particularly strong in the industrial segment, which is the fastest growing part of our business and now constitutes more than 35 percent of our revenues.”
In the first quarter, RSC also opened five new locations, bringing the total number of RSC locations to 478.
"For 2008, independent research firms are projecting that RSC's major end markets will increase at a low single-digit rate,” Olsson said. “This is consistent with our assumptions, and therefore our income statement guidance remains unchanged.” He added that RSC's expected rental revenues will grow 4 to 7 percent in 2008, total revenues to range from $1.80 to $1.85 billion, diluted earnings per share from $1.44 to $1.56, adjusted EBITDA from $835 to $860 million, and net capital expenditures from $200 to $250 million.
“With the introduction of the federal Economic Stimulus Act of 2008, which includes bonus depreciation for 2008, we are increasing our free cash flow projections from a range of $100 to $150 million to a range of $130 to $180 million or $305 million to $355 million before reduction in accounts payable," Olsson said.
