Herc Holdings said equipment revenue for the first quarter of 2020 was $386.5 million, up 2.4 percent from the $377.6 million reported in the same period in 2019. Strong year-over-year improvement in pricing was partially offset by lower volume, it said, as the impact of Covid-19 related orders began to slow the typical upturn in seasonal volume in mid-March.
Overall revenues were down for the quarter by 8 percent to $436.2 million, primarily due to a reduction in sales of rental equipment of $45.1 million, and $3.9 million reduction in sales of new equipment, parts and supplies compared to the prior year.
The rental company reported a net lost of $3.7 million in the quarter, compared to $6.7 million in Q1 2019.
“Equipment rental revenue improved year-over-year in the first quarter primarily due to positive rate growth,” said Larry Silber, president/CEO, in a prepared statement.
“In response to the onset of the Covid-19 pandemic in North America, we communicated and implemented safety and operating procedures based on the Centers for Disease Control and Prevention's guidelines to our employees and customers,” Silber said. “We are proud to be providing essential support to customers in a diverse mix of critical infrastructure sectors and nearly all of our branches are open and operating. Our ProSolutions team has been especially busy providing critical support to medical centers, hospitals and additional patient facilities. Our foremost priorities are the health and safety of our team, customers and communities, while supporting the needs of critical services and operations throughout North America.”
Net fleet capital expenditures were $48.4 million for the quarter. Gross fleet capital expenditures were $83.0 million, and proceeds from disposals were $34.6 million. As of March 31, 2020, the Company's total fleet was approximately $3.80 billion at OEC. Average fleet age was 46 months as of March 31, 2020, the same age as the comparable period last year.
What is Herc’s outlook for the rest of 2020?
“We have cut variable costs and taken steps to substantially reduce our capital expenditures to conserve capital,” said Silber. “As of the end of the first quarter, we had ample liquidity of $1.1 billion. These unprecedented times make it difficult to predict the length of the economic slowdown related to the Covid-19 pandemic or the full impact on our business. As a result, we are withdrawing our 2020 guidance. Nonetheless, we believe the steps we have taken provide ample liquidity to fund our business in 2020 and beyond.
“I am proud of the 'can do' attitude of our Herc Rentals team as we work to navigate this challenging time together. Our business model is resilient and our leadership team is experienced. We remain ready to support our customers' operations in whatever capacity we can during this uncertain time and especially when construction and business activities resume. We thank all of our team members for their professionalism and dedication in serving our customers and communities. Working together, we will emerge stronger and better.”
Source: Herc
