HEES H and E Equipment Services Inc

H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”, or the “Company”) today announced results for the fourth quarter and full year ended December 31, 2023, with record strategic expansion, impressive revenue growth and steady margin appreciation contributing to another year of record financial performance. On October 1, 2021, the Company sold its crane business, (the “Crane Sale”). All results and comparisons for the periods reported are presented on a continuing operations basis with the Crane Sale reported as discontinued operations in certain statements and schedules accompanying this report. Also, on December 15, 2022, the Company sold its Komatsu earthmoving distribution business, resulting in a pre-tax gain of $15.4 million in the fourth quarter of 2022, including $12.9 million recorded as a gain on sale of property and equipment, and $2.5 million as a gain on other, net.

FOURTH QUARTER 2023 SUMMARY WITH A COMPARISON TO FOURTH QUARTER 2022

• Revenues increased 9.3% to $385.8 million compared to $353.1 million.
• Net income totaled $53.5 million compared to $51.2 million. The effective income tax rate was 19.4% compared to 26.1%.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased 6.5% to $185.2 million compared to $173.9 million. Prior year results included the pre-tax gain associated with the sale of the Komatsu earthmoving distribution business. Adjusted EBITDA margin was 48.0% compared to 49.2%.
• Total equipment rental revenues were $316.9 million, an increase of $41.2 million, or 14.9%, compared to $275.7 million. Rental revenues were $280.6 million, an increase of $35.6 million, or 14.5%, compared to $245.0 million.
• Sales of rental equipment increased 34.3% to $40.6 million compared to $30.2 million. Margins improved to 66.0% compared to 51.2%.
• Sales of new equipment totaled $9.8 million, a decline of 54.5% compared to $21.5 million.
• Gross margin improved to 48.3% compared to 45.1%.
• Total equipment rental gross margins were 48.2% compared to 47.9%. Rental gross margins were 54.2% compared to 53.1%.
• Average time utilization (based on original equipment cost) was 68.4% compared to 72.0%. The Company’s rental fleet, based on original equipment cost, ended 2023 at approximately $2.8 billion, representing an 18.3% increase.
• Average rental rates improved 3.8% from the year-ago quarter and 0.8% on a sequential quarterly basis.
• Dollar utilization was 40.3% compared to 41.9%.
• Average rental fleet age on December 31, 2023, was 39.7 months compared to an industry average age of 49.0 months.
• Paid regular quarterly cash dividend of $0.275 per share of common stock.

Reviewing the Company’s fourth quarter and full year performance, Brad Barber, chief executive officer of H&E, referred to several important developments. Mr. Barber pointed out, “Strong execution of strategic initiatives and resilient non-residential activity resulted in healthy financial metrics throughout the year. Total revenues in the fourth quarter improved 9.3% compared to the year-ago quarter, while rental revenues grew 14.5% over the same period, resulting in a rental margin of approximately 54.2%. For the full year, total revenues set a Company record of just under $1.5 billion, representing an 18.1% increase compared to total revenues in the previous year. Over the same period, rental revenues grew 24.1%, exceeding $1.0 billion for the first time, and completed the year with an average margin of 52.1%. Indicative of the durable industry fundamentals, rental rates in the fourth quarter improved 3.8% compared to the same quarter in 2022, and 0.8% on a sequential quarterly basis. For the full year, rental rates were 5.6% better than 2022. Our strategic accomplishments in 2023 included a record gross fleet investment totaling $737 million, exceeding our revised target range for the year. We completed the year with a fleet original equipment cost (OEC) of approximately $2.8 billion, or 18.3% greater than our fleet OEC at the conclusion of 2022. Our average fleet age of 39.7 months remained among the youngest in the industry."

Mr. Barber went on to state, “The pace of branch expansion remained impressive throughout 2023, further strengthening the Company’s competitive position. The success of our accelerated branch expansion program led to a record 14 branch additions in 2023, including three new locations in the fourth quarter. These branch additions established greater density in the Gulf Coast, Mid-Atlantic, Southeast and Midwest regions, providing the Company with increased exposure to new projects. Also, additional growth and improved positioning was accomplished through the acquisition of attractive and well-managed businesses with operations in core metropolitan statistical areas of the U.S. One transaction, which closed in the fourth quarter, added three locations in California, increasing the number of branch additions to 17 in 2023, or a 14% increase across our branch network when compared to the branch count at the conclusion of 2022."

Addressing 2024 strategic growth initiatives, Mr. Barber said, “We plan to slow our 2024 gross fleet expenditures to a range of $450 million to $500 million. We believe our record fleet expenditures in 2023 and young fleet age advantageously position the Company to address the ongoing growth in construction markets and these factors should support steady improvement in physical utilization. Regarding our branch network, new branch growth will remain a fundamental component of our strategic plans in 2024 with 12 to 15 new locations expected in our branch expansion program. In addition, branch growth could be enhanced through attractive acquisition opportunities that offer access to vibrant construction markets in the U.S., as demonstrated by our latest acquisition which closed in early 2024, adding one location each in Phoenix and Denver.”

Mr. Barber noted the outlook for the equipment rental industry remains encouraging, supporting the point by saying, “Commentary from our customers regarding pending construction opportunities in 2024 remains optimistic and supports a business climate characterized by stable to modestly higher non-residential and industrial activity. Construction starts are projected to grow on a year-over-year basis with the growth reinforced by mega projects and increased spending on infrastructure programs. Also, we remain confident that expanding rental penetration will be a meaningful catalyst for increased industry growth.”

FINANCIAL DISCUSSION FOR FOURTH QUARTER 2023

Revenue

Total revenues increased 9.3% to $385.8 million in the fourth quarter of 2023 from $353.1 million in the fourth quarter of 2022. Total equipment rental revenues increased 14.9% to $316.9 million compared to $275.7 million in the year-ago quarter. Rental revenues increased 14.5% to $280.6 million compared to $245.0 million in the same period of comparison. Sales of rental equipment increased 34.3% to $40.6 million compared to $30.2 million in the fourth quarter of 2022. Sales of new equipment decreased 54.5% to $9.8 million compared to $21.5 million in the same quarter of 2022. The decline was due primarily to the divestiture of the Komatsu earthmoving business.

Gross Profit

Gross profit increased 16.9% in the fourth quarter of 2023 to $186.3 million compared to $159.4 million in the fourth quarter of 2022. Gross margin of 48.3% for the fourth quarter of 2023 compared to 45.1% over the same period of comparison. On a segment basis, and relative to the fourth quarter of 2022, gross margin on total equipment rentals was 48.2% compared to 47.9%. Rental margins were 54.2% compared to 53.1%. On average, rental rates in the fourth quarter of 2023 were 3.8% better than rates in the fourth quarter of 2022. Time utilization (based on original equipment cost) was 68.4% in the fourth quarter of 2023 compared to 72.0% in the year-ago quarter. Gross margins on sales of rental equipment were 66.0%, up from 51.2%, while gross margins on sales of new equipment improved to 15.3% compared to 13.6%.

Rental Fleet

At the end of the fourth quarter of 2023, the original equipment cost of the Company’s rental fleet was approximately $2.8 billion, which represented an 18.3%, or $432.6 million increase from the end of the fourth quarter of 2022. Dollar utilization for the fourth quarter of 2023 was 40.3% compared to 41.9% in the fourth quarter of 2022.

Selling, General and Administrative ("SG&A") Expenses

SG&A expenses for the fourth quarter of 2023 were $106.6 million, an increase of $12.1 million, or 12.8%, compared to $94.5 million in the fourth quarter of 2022. The higher expenses were primarily due to an increase in employee salaries, wages, payroll taxes and related employee benefits, in addition to an increase in facilities, promotion and depreciation expenses. SG&A expenses in the fourth quarter of 2023 as a percentage of total revenues were 27.6% compared to 26.8% in the fourth quarter of 2022. Approximately $6.3 million of SG&A expenses in the fourth quarter were attributable to the Company's expansion activities since the fourth quarter of 2022.

Income from Operations

Income from operations for the fourth quarter of 2023 was $81.2 million, or 21.1% of revenues, compared to $78.8 million, or 22.3% of revenues in the same quarter of 2022. Results for the prior year quarter included a gain of $12.9 million resulting from the sale of the Komatsu earthmoving distribution business.

Interest Expense

Interest expense was $16.3 million for the fourth quarter of 2023 compared to $13.5 million in fourth quarter of 2022.

Net Income

Net income in the fourth quarter of 2023 was $53.5 million, or $1.47 per diluted share, compared to net income of $51.2 million, or $1.41 per diluted share, in the fourth quarter of 2022. Results for the prior year quarter included a gain of $15.4 million resulting from the sale of the Komatsu earthmoving distribution business. The effective income tax rate for the fourth quarter of 2023 was 19.4% compared to 26.1% in the same quarter of 2022.

Adjusted EBITDA

Adjusted EBITDA in the fourth quarter of 2023 increased 6.5% to $185.2 million compared to $173.9 million in the fourth quarter of 2022. Adjusted EBITDA margin in the fourth quarter of 2023 was 48.0% of revenues compared to 49.2% a year-ago quarter. Results for the fourth quarter of 2022 included a gain of $15.4 million from the sale of the Komatsu earthmoving distribution business.

FINANCIAL DISCUSSION FOR THE YEAR ENDED DECEMBER 31, 2023

Revenue

Revenues totaled $1.5 billion, an increase of $224.7 million, or 18.1%, when compared to $1.2 billion in 2022. Total equipment rental revenues increased 24.1% to $1.2 billion compared to $956.0 million in the previous year. Rental revenues increased 24.1% to $1.1 billion compared to $847.6 million in 2022. Sales of rental equipment increased 81.6% to $165.1 million from $90.9 million in the previous year while sales of new equipment decreased 57.7% to $39.1 million compared to $92.5 million over the same period of comparison. The decline was due primarily to the divestiture of the Komatsu earthmoving business.

Gross Profit

Gross profit increased 23.3%, or $129.3 million, to $684.5 million in 2023 from $555.2 million in 2022. Gross margin improved to 46.6% in 2023 compared to 44.6% for 2022. On a segment basis and relative to the previous year, gross margin on total equipment rentals was 46.7% compared to 48.1% and rental margins were 52.1% compared to 53.2%. On average, 2023 rental rates increased 5.6% compared to 2022. In 2023, time utilization (based on original equipment cost) of 68.8% compared to the year-ago result of 72.3%. Gross margins on sales of rental equipment improved to 60.5% compared to 48.8% while gross margins on sales of new equipment were 14.1% compared to 14.2%.

Selling, General and Administrative Expenses

SG&A expenses for 2023 were $405.4 million compared to $343.8 million in 2022, an increase of $61.6 million, or 17.9%. The increase was primarily attributable to employee salaries, wages, payroll taxes, and related employee benefits, along with higher facilities and depreciation expenses, and an increase in professional fees. Approximately $31.0 million of the increased SG&A expenses in 2023 were related to the Company's expansion efforts, including an acquisition and 14 warm starts during the year. In 2023, SG&A expenses as a percentage of total revenues were 27.6%, unchanged from 2022.

Income from Operations

Income from operations in 2023 totaled $276.7 million, or 18.8% of revenues, compared to $228.2 million, or 18.3% of revenues in 2022. Results for the prior year included a gain of $12.9 million resulting from the sale of the Komatsu earthmoving distribution business.

Interest Expense

Interest expense in 2023 was $60.9 million compared to $54.0 million in the previous year.

Net Income

Net income in 2023 totaled $169.3 million, or $4.66 per diluted share, compared to net income in 2022 of $133.7 million, or $3.70 per diluted share. Results for the prior year included a gain of $15.4 million resulting from the sale of the Komatsu earthmoving distribution business. The effective income tax rate in 2023 was 24.2% compared to 26.0% in 2022.

Adjusted EBITDA

Adjusted EBITDA for 2023 improved 26.7% to $688.2 million compared to $543.0 million in 2022. Adjusted EBITDA margin in 2023 was 46.8% of revenues compared to 43.6% in 2022. Results for the prior year included a gain of $15.4 million resulting from the sale of the Komatsu earthmoving distribution business.

Non-GAAP Financial Measures

This press release contains certain non-GAAP measures (EBITDA, Adjusted EBITDA, Adjusted Income from Operations, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per share and the disaggregation of equipment rental revenues and cost of sales numbers) detailed below. EBITDA and Adjusted EBITDA are non-GAAP measures as defined under the rules of the Securities and Exchange Commission ("SEC"). We define Adjusted EBITDA for the periods presented as EBITDA adjusted for non-cash stock-based compensation expense and the impairment of goodwill.

We use EBITDA and Adjusted EBITDA in our business operations to, among other things, evaluate the performance of our business, develop budgets and measure our performance against those budgets. We also believe that analysts and investors use EBITDA and Adjusted EBITDA as supplemental measures to evaluate a company’s overall operating performance. However, EBITDA and Adjusted EBITDA have material limitations as analytical tools and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. We consider them useful tools to assist us in evaluating performance because it eliminates items related to components of our capital structure, taxes and non-cash charges. The items that we have eliminated in determining EBITDA for the periods presented are interest expense, income taxes, depreciation of fixed assets (which includes rental equipment and property and equipment) and amortization of intangible assets and, in the case of Adjusted EBITDA, any other non-recurring items described above applicable to the particular period. However, some of these eliminated items are significant to our business. For example, (i) interest expense is a necessary element of our costs and ability to generate revenue because we incur a significant amount of interest expense related to our outstanding indebtedness; (ii) payment of income taxes is a necessary element of our costs; and (iii) depreciation is a necessary element of our costs and ability to generate revenue because rental equipment is the single largest component of our total assets and we recognize a significant amount of depreciation expense over the estimated useful life of this equipment. Any measure that eliminates components of our capital structure and costs associated with carrying significant amounts of fixed assets on our consolidated balance sheet has material limitations as a performance measure. In light of the foregoing limitations, we do not rely solely on EBITDA and Adjusted EBITDA as performance measures and also consider our GAAP results. EBITDA and Adjusted EBITDA are not measurements of our financial performance or liquidity under GAAP and, accordingly, should not be considered alternatives to net income, operating income or any other measures derived in accordance with GAAP. Because EBITDA and Adjusted EBITDA may not be calculated in the same manner by all companies, these measures may not be comparable to other similarly titled measures used by other companies.

We use Adjusted Income from Continuing Operations, Adjusted Net Income from Continuing Operations, Adjusted Net Income, Adjusted Net Income from Continuing Operations per Share, and Adjusted Net Income per Share ("Adjusted Income Measures") in our business operations to, among other things, analyze our financial performance on a comparative period basis without the effects of significant one-time, non-recurring items. We define the Adjusted Income Measures for the periods presented as Income from Operations, Net Income and Net Income per Share, respectively, adjusted for the impairment of goodwill. Additionally, we believe Adjusted Income Measures, in combination with financial results calculated in accordance with GAAP, provide investors with useful information and additional perspective concerning future profitability. However, Adjusted Income Measures are not measurements of our financial performance under GAAP and, accordingly, should not be considered in isolation or as alternatives to GAAP Income from Operations, Net Income and Net Income per Share. Because Adjusted Income Measures may not be calculated in the same manner by all companies, these measures may not be comparable to other similarly titled measures used by other companies.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures can be found in the financial tables accompanying this earnings release.

Conference Call

The Company’s management will hold a conference call to discuss fourth quarter 2023 results today, February 22, 2024, at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 844-887-9400 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on February 22, 2024, and will continue through February 29, 2024, by dialing 877-344-7529 and entering the confirmation code 2771115.

The live broadcast of the Company’s quarterly conference call will be available online at www.he-equipment.com on February 22, 2024, beginning at 10:00 a.m. (Eastern Time) and will remain available for 30 days. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.he-equipment.com prior to the call. The presentation materials will be in Adobe Acrobat format.

About H&E Equipment Services, Inc.

Founded in 1961, H&E Equipment Services, Inc. is one of the largest rental equipment companies in the nation. The Company’s fleet is among the industry’s youngest and most versatile with a superior equipment mix comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines. H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest, and Mid-Atlantic regions.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements about H&E’s beliefs and expectations, are “forward-looking statements” within the meaning of the federal securities laws. Statements containing the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” “foresee” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) general economic and geopolitical conditions in North America and elsewhere throughout the globe and construction and industrial activity in the markets where we operate in North America; (2) our ability to forecast trends in our business accurately, and the impact of economic downturns and economic uncertainty on the markets we serve (including as a result of current uncertainty due to inflation and increasing interest rates); (3) the impact of conditions in the global credit and commodity markets and their effect on construction spending and the economy in general; (4) trends in oil and natural gas which could adversely affect the demand for our services and products; (5) our inability to obtain equipment and other supplies for our business from our key suppliers on acceptable terms or at all, as a result of supply chain disruptions, insolvency, financial difficulties, supplier relationships or other factors; (6) increased maintenance and repair costs as our fleet ages and decreases in our equipment’s residual value; (7) risks related to a global pandemic and similar health concerns, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response to the pandemic, material delays and cancellations of construction or infrastructure projects, labor shortages, supply chain disruptions and other impacts to the business; (8) our indebtedness; (9) risks associated with the expansion of our business and any potential acquisitions we may make, including any related capital expenditures, or our ability to consummate such acquisitions; (10) our ability to integrate any businesses or assets we acquire; (11) competitive pressures; (12) security breaches, cybersecurity attacks, increased adoption of artificial intelligence technologies, failure to protect personal information, compliance with data protection laws and other disruptions in our information technology systems; (13) adverse weather events or natural disasters; (14) risks related to climate change and climate change regulation; (15) compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and (16) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the SEC, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release, whether as a result of any new information, future events or otherwise. These statements are based on the current beliefs and assumptions of H&E’s management, which in turn are based on currently available information and important, underlying assumptions. Investors, potential investors, security holders and other readers are urged to consider the above-mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

H&E EQUIPMENT SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Amounts in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

Equipment rentals

 

$

316,874

 

 

$

275,676

 

 

$

1,186,152

 

 

$

956,042

 

Sales of rental equipment

 

 

40,598

 

 

 

30,226

 

 

 

165,074

 

 

 

90,885

 

Sales of new equipment

 

 

9,791

 

 

 

21,513

 

 

 

39,099

 

 

 

92,526

 

Parts, service and other

 

 

18,543

 

 

 

25,702

 

 

 

78,891

 

 

 

105,065

 

Total revenues

 

 

385,806

 

 

 

353,117

 

 

 

1,469,216

 

 

 

1,244,518

 

Cost of revenues:

 

 

 

 

 

 

 

 

Rental depreciation

 

$

88,876

 

 

 

79,134

 

 

 

347,022

 

 

 

267,395

 

Rental expense

 

 

39,649

 

 

 

35,733

 

 

 

156,818

 

 

 

128,850

 

Rental other

 

 

35,492

 

 

 

28,779

 

 

 

128,873

 

 

 

99,554

 

 

 

 

164,017

 

 

 

143,646

 

 

 

632,713

 

 

 

495,799

 

Sales of rental equipment

 

 

13,787

 

 

 

14,754

 

 

 

65,183

 

 

 

46,569

 

Sales of new equipment

 

 

8,291

 

 

 

18,581

 

 

 

33,569

 

 

 

79,430

 

Parts, service and other

 

 

13,372

 

 

 

16,770

 

 

 

53,290

 

 

 

67,557

 

Total cost of revenues

 

 

199,467

 

 

 

193,751

 

 

 

784,755

 

 

 

689,355

 

Gross profit

 

 

186,339

 

 

 

159,366

 

 

 

684,461

 

 

 

555,163

 

Selling, general and administrative expenses

 

 

106,620

 

 

 

94,485

 

 

 

405,432

 

 

 

343,845

 

Impairment of goodwill

 

 

—

 

 

 

—

 

 

 

5,714

 

 

 

—

 

Gain on sales of property and equipment, net

 

 

1,523

 

 

 

13,925

 

 

 

3,389

 

 

 

16,836

 

Income from operations

 

 

81,242

 

 

 

78,806

 

 

 

276,704

 

 

 

228,154

 

Other income (expense):

 

 

 

 

 

 

 

 

Interest expense

 

 

(16,349

)

 

 

(13,538

)

 

 

(60,891

)

 

 

(54,033

)

Other, net

 

 

1,533

 

 

 

3,953

 

 

 

7,384

 

 

 

6,609

 

Total other expense, net

 

 

(14,816

)

 

 

(9,585

)

 

 

(53,507

)

 

 

(47,424

)

Income from operations before provision for income taxes

 

 

66,426

 

 

 

69,221

 

 

 

223,197

 

 

 

180,730

 

Provision for income taxes

 

 

12,902

 

 

 

18,069

 

 

 

53,904

 

 

 

47,036

 

Net income from continuing operations

 

$

53,524

 

 

$

51,152

 

 

$

169,293

 

 

$

133,694

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

Loss from discontinued operations before benefit from income taxes

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(2,049

)

Benefit from income taxes

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(525

)

Net loss from discontinued operations

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(1,524

)

 

 

 

 

 

 

 

 

 

Net income

 

$

53,524

 

 

$

51,152

 

 

$

169,293

 

 

$

132,170

 

H&E EQUIPMENT SERVICES, INC.

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

(Amounts in thousands, except per share amounts)

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net income from continuing operations per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.48

 

 

$

1.42

 

 

$

4.69

 

 

$

3.72

 

Diluted

 

$

1.47

 

 

$

1.41

 

 

$

4.66

 

 

$

3.70

 

Net loss from discontinued operations per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(0.04

)

Diluted

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(0.04

)

Net income per common share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.48

 

 

$

1.42

 

 

$

4.69

 

 

$

3.68

 

Diluted

 

$

1.47

 

 

$

1.41

 

 

$

4.66

 

 

$

3.66

 

Weighted average common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

36,167

 

 

 

35,997

 

 

 

36,100

 

 

 

35,943

 

Diluted

 

 

36,340

 

 

 

36,153

 

 

 

36,329

 

 

 

36,089

 

H&E EQUIPMENT SERVICES, INC.

SELECTED BALANCE SHEET DATA (unaudited)

(Amounts in thousands)

 

 

December 31, 2023

 

 

December 31, 2022

 

Cash and cash equivalents

 

$

8,500

 

 

$

81,330

 

Rental equipment, net

 

 

1,756,578

 

 

 

1,418,951

 

Total assets

 

 

2,639,886

 

 

 

2,291,699

 

Total debt (1)

 

 

1,434,661

 

 

 

1,251,594

 

Total liabilities

 

 

2,105,597

 

 

 

1,890,657

 

Stockholders' equity

 

 

534,289

 

 

 

401,042

 

Total liabilities and stockholders' equity

 

$

2,639,886

 

 

$

2,291,699

 

(1)

Total debt consists of the aggregate amounts on the senior unsecured notes, senior secured credit facility, and finance lease obligations

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

Twelve Months Ended December 31,

 

 

 

2023

 

 

 

 

 

2023

 

 

 

As Reported

 

 

Adjustment

 

 

As Adjusted

 

Gross profit

 

$

684,461

 

 

$

—

 

 

$

684,461

 

Selling, general and administrative expenses

 

 

405,432

 

 

 

—

 

 

 

405,432

 

Impairment of goodwill

 

 

5,714

 

 

 

(5,714

)

 

 

—

 

Gain on sale of property and equipment, net

 

 

3,389

 

 

 

—

 

 

 

3,389

 

Income from continuing operations

 

 

276,704

 

 

 

5,714

 

 

 

282,418

 

Interest expense

 

 

(60,891

)

 

 

—

 

 

 

(60,891

)

Other income, net

 

 

7,384

 

 

 

—

 

 

 

7,384

 

Income from continuing operations before provision for income taxes

 

 

223,197

 

 

 

5,714

 

 

 

228,911

 

Provision for income taxes

 

 

53,904

 

 

 

1,307

 

 

 

55,211

 

Net income from continuing operations

 

$

169,293

 

 

$

4,407

 

 

$

173,700

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision for income taxes

 

 

—

 

 

 

—

 

 

 

—

 

Provision for income taxes

 

 

—

 

 

 

—

 

 

 

—

 

Net income from discontinued operations

 

$

—

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

169,293

 

 

$

4,407

 

 

$

173,700

 

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

Twelve Months Ended December 31,

 

 

 

2023

 

 

 

 

 

2023

 

 

 

As Reported

 

 

Adjustment

 

 

As Adjusted

 

NET INCOME PER SHARE (1)

 

 

 

 

 

 

 

 

 

Basic - Net income from continuing operations per common share:

 

$

4.69

 

 

$

0.12

 

 

$

4.81

 

Basic - Net income from discontinued operations per common share:

 

$

—

 

 

$

—

 

 

$

—

 

Basic - Net income per common share:

 

$

4.69

 

 

$

0.12

 

 

$

4.81

 

Basic - Weighted average common shares outstanding:

 

 

36,100

 

 

 

36,100

 

 

 

36,100

 

 

 

 

 

 

 

 

 

 

 

Diluted - Net income from continuing operations per common share:

 

$

4.66

 

 

$

0.12

 

 

$

4.78

 

Diluted - Net income from discontinued operations per common share:

 

$

—

 

 

$

—

 

 

$

—

 

Diluted - Net income per common share

 

$

4.66

 

 

$

0.12

 

 

$

4.78

 

Diluted - Weighted average common shares outstanding:

 

 

36,329

 

 

 

36,329

 

 

 

36,329

 

(1)

Because of the method used in calculating per share data, the summation of the above per share data may not necessarily total to the as adjusted per share data.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

 

 

 

 

 

 

 

 

 

 

Net Income

 

$

53,524

 

 

$

51,152

 

 

$

169,293

 

 

$

132,170

 

Net Loss from discontinued operations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(1,524

)

Net Income from continuing operations

 

 

53,524

 

 

 

51,152

 

 

 

169,293

 

 

 

133,694

 

Interest Expense

 

 

16,349

 

 

 

13,538

 

 

 

60,891

 

 

 

54,033

 

Provision for income taxes

 

 

12,902

 

 

 

18,069

 

 

 

53,904

 

 

 

47,036

 

Depreciation

 

 

98,330

 

 

 

87,096

 

 

 

381,959

 

 

 

296,310

 

Amortization of intangibles

 

 

1,407

 

 

 

1,682

 

 

 

6,455

 

 

 

4,660

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from continuing operations

 

$

182,512

 

 

$

171,537

 

 

$

672,502

 

 

$

535,733

 

 

 

 

 

 

 

 

 

 

 

 

 

Impairment of goodwill

 

 

—

 

 

 

—

 

 

 

5,714

 

 

 

—

 

Non-cash stock-based compensation expense

 

 

2,722

 

 

 

2,348

 

 

 

10,026

 

 

 

7,263

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA from continuing operations

 

$

185,234

 

 

$

173,885

 

 

$

688,242

 

 

$

542,996

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss from discontinued operations

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(1,524

)

Benefit for income taxes

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(525

)

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from discontinued operations

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(2,049

)

Loss on sale of discontinued operations

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,917

 

Adjusted EBITDA from discontinued operations

 

$

—

 

 

$

—

 

 

$

—

 

 

$

(132

)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

185,234

 

 

$

173,885

 

 

$

688,242

 

 

$

542,864

 

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

RENTAL

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals (1)

 

$

280,576

 

 

$

245,004

 

 

$

1,051,632

 

 

$

847,555

 

Rental other

 

 

36,298

 

 

 

30,672

 

 

 

134,520

 

 

 

108,487

 

Total equipment rentals

 

 

316,874

 

 

 

275,676

 

 

 

1,186,152

 

 

 

956,042

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL COST OF SALES

 

 

 

 

 

 

 

 

 

 

 

 

Rental depreciation

 

 

88,876

 

 

 

79,134

 

 

 

347,022

 

 

 

267,395

 

Rental expense

 

 

39,649

 

 

 

35,733

 

 

 

156,818

 

 

 

128,850

 

Rental other

 

 

35,492

 

 

 

28,779

 

 

 

128,873

 

 

 

99,554

 

Total rental cost of sales

 

 

164,017

 

 

 

143,646

 

 

 

632,713

 

 

 

495,799

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS PROFIT

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

 

152,051

 

 

 

130,137

 

 

 

547,792

 

 

 

451,310

 

Rentals other

 

 

806

 

 

 

1,893

 

 

 

5,647

 

 

 

8,933

 

Total rental revenues gross profit

 

$

152,857

 

 

$

132,030

 

 

$

553,439

 

 

$

460,243

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS MARGIN

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

 

54.2

%

 

 

53.1

%

 

 

52.1

%

 

 

53.2

%

Rentals other

 

 

2.2

%

 

 

6.2

%

 

 

4.2

%

 

 

8.2

%

Total rental revenues gross margin

 

 

48.2

%

 

 

47.9

%

 

 

46.7

%

 

 

48.1

%

(1)

Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of operations in this press release as a single line item, “Equipment Rentals.” The above table disaggregates our equipment rental revenues for discussion and analysis purposes only.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240222754755/en/

Leslie S. Magee Chief Financial Officer 225-298-5261 lmagee@he-equipment.com Jeffrey L. Chastain Vice President of Investor Relations 225-952-2308 jchastain@he-equipment.com