H&E Equipment Q2 2022 Earnings Report
Key Takeaways
H&E Equipment Services reported a strong second quarter in 2022, with revenues increasing by 10.9% to $294.7 million and net income reaching $27.9 million. The company achieved record rental revenues and gross profit, alongside improvements in gross margin and adjusted EBITDA margin.
Revenues increased by 10.9% to $294.7 million compared to Q2 2021.
Net income was $27.9 million, a significant increase from $12.3 million in Q2 2021.
Adjusted EBITDA totaled $121.9 million, up 28.8% from $94.6 million in Q2 2021, with a margin of 41.4%.
Total equipment rental revenues increased by 29.6% to $227.6 million compared to $175.6 million in Q2 2021.
H&E Equipment
H&E Equipment
H&E Equipment Revenue by Segment
Forward Guidance
Non-residential construction opportunities are plentiful across H&E's regions of operation with no visible trends that suggest construction project delays or cancellations. Demand for the rental fleet remains strong, and current customer feedback suggests favorable conditions should persist as H&E addresses the seasonal strength of its business cycle. Key leading indicators of construction activity are remaining at levels that support expansion. Under the prevailing business conditions, healthy utilization levels should continue for the balance of the year with additional improvement in rental rates expected.
Positive Outlook
- Non-residential construction opportunities are plentiful across our regions of operation.
- No visible trends that suggest construction project delays or cancellations.
- Demand for our rental fleet remains strong.
- Current customer feedback suggests favorable conditions should persist as we address the seasonal strength of our business cycle.
- Healthy utilization levels should continue for the balance of the year with additional improvement in rental rates expected.
Challenges Ahead
- Supply chain disruptions remain an inconvenient but temporary reality of our industry and continue to hinder the timely delivery of a portion of our equipment orders.
- Due to the inability of certain manufacturing partners to meet their commitments to our fleet investment for the year, we will reduce our planned capital expenditures by continuing to slow our fleet sales over the balance of 2022.
- Following this action, which is expected to result in a revised gross fleet expenditure of approximately $465 million to $500 million, we anticipate no change in our year-end OEC when compared to our initial internal expectation for the year.
- In a business environment characterized by exceptional equipment demand, supply chain disruptions remain an inconvenient but temporary reality of our industry and continue to hinder the timely delivery of a portion of our equipment orders.
- The inability of certain manufacturing partners to meet their commitments to our fleet investment for the year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income