Herc Holdings Q1 2020 Earnings Report
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
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Due to the uncertainty related to the COVID-19 pandemic, Herc Holdings has withdrawn its 2020 guidance.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- 2020 guidance has been withdrawn.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