Stock under Consideration: H&E Equipment Services Inc. (NASDAQ: HEES)

BATON ROUGE, La., June 22, 2019 – Shares of H&E Equipment Services Inc. (NASDAQ: HEES) declined -0.49% to $28.26. The stock traded total volume of 182.684K shares lower than the average volume of 223.90K shares.

H&E Equipment Services Inc. (HEES) recently reported first-quarter net income of $14.20M.

FINANCIAL NEGOTIATION FOR FIRST QUARTER 2019

Revenue:

Total revenues increased 20.4% to $313.60M in the first quarter of 2019 from $260.50M in the first quarter of 2018. Total equipment rental revenues increased 22.9% to $176.10M contrast with $143.30M in the first quarter of 2018 (as adjusted). Rental revenues (as formerly stated) increased 23.4% to $159.70M contrast with $129.40M in the first quarter of 2018. New equipment sales increased 27.1% to $59.10M from $46.50M a year ago. Used equipment sales increased 19.2% to $29.60M contrast to $24.90M a year ago. Parts sales increased 8.1% to $30.40M from $28.20M in the first quarter of 2018. Service revenues increased 3.5% to $15.60M contrast to $15.00M a year ago.

Gross Profit:

Gross profit increased 22.8% to $113.70M from $92.60M in the first quarter of 2018. Gross margin was 36.3% for the quarter ended March 31, 2019, as contrast to 35.5% for the quarter ended March 31, 2018. On a segment basis, gross margin on total equipment rentals was 44.3% in the first quarter of 2019 contrast to 43.2% in the first quarter of 2018 (as adjusted). Rental margins (as formerly stated) were 48.7% in the first quarter of 2019 contrast to 47.6% last year. On average, rental rates were 2.3% higher than rates in the first quarter of 2018. Time utilization (based on original equipment cost) was 70.0% in the first quarter of 2019 contrast to 70.4% a year ago.

Rental Fleet:

At the end of the first quarter of 2019, the original acquisition cost of the Company’s rental fleet was $1.90B, a boost of $351.10M from the end of the first quarter of 2018. Dollar utilization for the first quarter of 2019 was 35.2% contrast to 34.7% for the first quarter of 2018.

Selling, General and Administrative Expenses:

SG&A expenses for the first quarter of 2019 were $78.60M contrast with $65.90M the prior year, a $12.80M, or 19.4%, increase. SG&A expenses in the first quarter of 2019 as a percentage of total revenues were 25.1% contrast to 25.3% a year ago. Employee salaries, wages, payroll taxes and related employee benefit and other employee related expenses increased $7.90M, mainly as a result of our acquisitions since March 31, 2018, and a larger workforce and higher incentive compensation related to increased profitability. Legal and professional fees increased $0.70M. Facility related expenses mainly rent expense; increased $1.40M and liability insurance costs increased $0.80M. Depreciation and amortization increased $0.70M. Expenses related to Greenfield branch expansions increased $0.70M contrast to a year ago.

Income from Operations:

Income from operations for the first quarter of 2019 increased 30.6% to $35.70M, or 11.4% of revenues, contrast to $27.30M, or 10.5% of revenues, a year ago.

Interest Expense:

Interest expense was $16.90M for the first quarter of 2019 contrast to $14.70M a year ago.

Net Income:

Net income was $14.20M, or $0.40 per diluted share, in the first quarter of 2019 contrast to net income of $9.50M, or $0.26 per diluted share, in the first quarter of 2018. The effective income tax rate was 26.4% in the first quarter of 2019 and 27.5% in the first quarter of 2018.

Adjusted EBITDA:

Adjusted EBITDA for the first quarter of 2019 increased 24.7% to $100.90M contrast to $80.90M in the first quarter of 2018. Adjusted EBITDA as a percentage of revenues was 32.2% contrast with 31.1% in the first quarter of 2018.

HEES has the market capitalization of $1.03B and its EPS growth ratio for the past five years was 11.20%. The return on assets ratio of the Company was 4.50% while its return on investment ratio stands at 10.10%. Price to sales ratio was 0.79 while 74.70% of the stock was owned by institutional investors.

Ameena Dalia

Finance and Entertainment Reporter