Herc Holdings Q4 2019 Earnings Report
Key Takeaways
Herc Holdings reported a slight decrease in total revenues but an increase in equipment rental revenue and net income in Q4 2019. The company's strategic initiatives led to pricing improvements and operating efficiency gains, resulting in the highest fourth-quarter adjusted EBITDA margin since the spin-off in 2016.
Equipment rental revenue increased by 2.1% to $457.0 million.
Total revenues decreased slightly by 0.7% to $540.1 million.
Net income increased by 5.4% to $35.1 million, or $1.20 per diluted share.
Adjusted EBITDA increased by 8.1% to $214.4 million, with adjusted EBITDA margin rising to 39.7%.
Herc Holdings
Herc Holdings
Herc Holdings Revenue by Segment
Forward Guidance
Herc Holdings anticipates adjusted EBITDA growth for 2020 between 3% to 7% over 2019. The company plans a moderate increase in net fleet capital expenditures to improve fleet mix and expects to generate substantial positive free cash flow, primarily used to reduce net leverage.
Positive Outlook
- Expect adjusted EBITDA in 2020 to grow between approximately 3% to 7% over 2019
- Plan a moderate increase in net fleet capital expenditures in 2020 over last year to improve our mix with modest fleet growth.
- Expect to continue to generate substantial positive free cash flow this year
- Free cash flow will be primarily used to reduce net leverage
- Targeted branch openings are expected to drive future profitability
Challenges Ahead
- Company does not provide forward-looking guidance for certain financial measures on a GAAP basis.
- Items contained in the GAAP measures, which may be significant, cannot be reasonably estimated.
- Restructuring and restructuring-related charges cannot be reasonably estimated.
- Gains and losses from asset sales cannot be reasonably estimated.
- Spin-off costs cannot be reasonably estimated.
Revenue & Expenses
Visualization of income flow from segment revenue to net income