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Mar 31, 2020
Herc Holdings Q1 2020 Earnings Report
Herc Holdings reported mixed results for Q1 2020. Equipment rental revenue increased, but total revenues decreased due to lower sales of rental equipment. The company reported a net loss, but adjusted EBITDA improved. Due to COVID-19 uncertainty, 2020 guidance was withdrawn.
Key Takeaways
Herc Holdings reported a 2.4% increase in equipment rental revenue to $386.5 million for Q1 2020. Total revenues were $436.2 million, down from $475.7 million in the prior year. The company reported a net loss of $3.7 million, or $0.13 per diluted share, but adjusted EBITDA increased 3.8% to $147.7 million.
Equipment rental revenue increased 2.4% to $386.5 million, driven by improved pricing of 2.4%.
Total revenues were $436.2 million, a decrease from $475.7 million in the prior-year period, primarily due to lower sales of rental equipment.
Net loss was $3.7 million, or $0.13 per diluted share, compared to a net loss of $6.7 million, or $0.23 per diluted share, in the same period last year.
Adjusted EBITDA increased 3.8% to $147.7 million, with a 400 basis point improvement in adjusted EBITDA margin to 33.9%.
Herc Holdings
Herc Holdings
Herc Holdings Revenue by Segment
Revenue by Segment
Equipment Rental Revenue
CapyFin.comSales of Rental Equip. Revenue
CapyFin.comNew Equip., Parts, Supplies Revenue
CapyFin.comService and Other Revenue
CapyFin.com Forward Guidance
Due to the uncertainty related to the COVID-19 pandemic, Herc Holdings has withdrawn its 2020 guidance.
Positive Outlook
- Variable costs have been cut.
- Capital expenditures have been substantially reduced to conserve capital.
- Ample liquidity of $1.1 billion as of the end of the first quarter.
- The Company believes the steps taken provide ample liquidity to fund the business in 2020 and beyond.
- The business model is resilient and the leadership team is experienced.
Challenges Ahead
- Uncertainty related to the length of the economic slowdown related to the COVID-19 pandemic.
- Difficulty in predicting the full impact of COVID-19 on the business.
- 2020 guidance has been withdrawn.
- Impact of COVID-19 related orders began to slow the typical upturn in seasonal volume in mid-March.
- Free cash flow in 2020 was impacted by lower sales of rental equipment and the timing of interest payments on the Company's Senior Notes.
Revenue & Expenses
Visualization of income flow from segment revenue to net income