H&E Equipment Services has announced its Q2 2022 results, highlighted by a 10.9 percent increase in revenues versus Q2 2021.
"Our excellent second quarter financial performance showed the continuation of robust fundamental activity across our industry and significant progress toward our 2022 growth initiatives," said Brad Barber, CEO of H&E Equipment Services. "Rental revenues were 28.0 percent better than the same quarter in 2021 and improved 13.6 percent on a sequential quarterly basis.
"This strong growth led to further appreciation in our rental gross margin, to 53.7 percent, or 380 basis points ahead of the previous quarter in 2022," Barber said. "This improvement in financial metrics was driven by enhanced contribution from both rental rates and utilization. Rental rates closed the quarter at an impressive 9.4 percent better than the year-ago quarter and showed a 3.5 percent gain over the first quarter of 2022. In addition, with high demand for our rental fleet, average physical utilization closed the quarter at 73.2 percent, or 450 and 280 basis points better when compared to the second quarter of 2021 and the previous quarter in 2022, respectively. We also grew our fleet, closing the quarter with a fleet original equipment cost of just over $2.0 billion, representing a record level for H&E."
Other highlights:
- Net income was $27.9 million compared to $12.3 million in the second quarter of 2021. The effective income tax rate was 26.8 percent compared to 28.2 percent in the second quarter of 2021.
- Adjusted EBITDA totaled $121.9 million, an increase of 28.8 percent compared to $94.6 million in the second quarter of 2021, resulting in a margin of 41.4 percent of revenues compared to 35.6 percent in the second quarter of 2021.
- Total equipment rental revenues were $227.6 million, an increase of $52.0 million, or 29.6 percent, compared to $175.6 million in the second quarter of 2021. Rental revenues were $201.2 million, an increase of $44.0 million, or 28 percent, compared to $157.2 million in the second quarter of 2021.
- Used equipment sales decreased 47.4 percent to $18.8 million compared to $35.8 million in the second quarter of 2021. Margins improved to 47.6 percent compared to 36.7 percent in the second quarter of 2021.
- New equipment sales totaled $21.5 million, a decrease of 22.2 percent when compared to $27.6 million in the second quarter of 2021.
- Gross margin improved to 44.9 percent compared to 37.6 percent in the second quarter of 2021.
- Total equipment rental gross margins were 48.6 percent compared to 41.7 percent in the second quarter of 2021. Rental gross margins were 53.7 percent compared to 46.6 percent over the same period of comparison.
- Average time utilization (based on original equipment cost) was 73.2 percent compared to 68.7 percent in the second quarter of 2021. The Company’s rental fleet, based on original acquisition cost, closed the second quarter of 2022 at just over $2.0 billion, an increase of $228.2 million, or 12.8 percent, compared to the second quarter of 2021.
- Average rental rates increased 9.4 percent when compared to the second quarter of 2021, and 3.5 percent when compared to the first quarter of 2022.
Source: H&E Equipment Services
