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Sep 30, 2020
H&E Equipment Q3 2020 Earnings Report
H&E Equipment Services experienced a decline in revenue and net income compared to the previous year.
Key Takeaways
H&E Equipment Services reported a decrease in revenue by 18.1% to $289.3 million, and a decrease in net income to $10.1 million for the third quarter of 2020. The company's results were impacted by declines in total rental revenue and new equipment sales, though used equipment sales increased. Adjusted EBITDA also decreased by 22.5% to $98.8 million.
Revenues decreased 18.1% to $289.3 million.
Net income was $10.1 million.
Adjusted EBITDA decreased 22.5% to $98.8 million.
Total equipment rental revenues decreased 18.8% to $165.8 million.
Revenue by Segment
Forward Guidance
H&E Equipment Services plans to accelerate its growth strategy by significantly increasing the number of warm starts next year and pursuing acquisition opportunities in both the general rental and specialty rental businesses.
Positive Outlook
- Demand in end-user rental markets accelerated during the third quarter.
- Physical utilization was 63.8% for the third quarter, representing a 430 basis point increase from the second quarter.
- Ongoing actions to reduce capital expenditures and operating costs resulted in significant free cash flow for the quarter.
- Continued to improve leverage and liquidity.
- The current environment could further increase the secular shift toward renting equipment versus owning, creating greater opportunities to increase market share.
Challenges Ahead
- Total revenues were down 18.1%, or $63.7 million, compared to a year ago.
- Total rental revenue declined 18.8%, or $38.3 million, from a year ago.
- New equipment sales declined 42.7%, or $27.8 million, from a year ago.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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