Nesco Holdings, Inc. (NSCO) Misses Q1 EPS by 27c, Revenues Beat; Withdraws FY20 Guidance

Nesco Holdings, Inc. (NYSE: NSCO) reported Q1 EPS of ($0.33), $0.27 worse than the analyst estimate of ($0.06). Revenue for the quarter came in at $81.7 million versus the consensus estimate of $79.3 million.

FIRST QUARTER 2020 HIGHLIGHTS

• Total revenue of $81.7 million (+32.9% from 2019)
• Equipment rental revenue of $47.1 million (+9.7% from 2019)
• Equipment sales revenue of $16.7 million (+71.0% from 2019)
• Parts, tools, and accessories revenue of $18.0 million (+103.7% from 2019)
• Consolidated net loss of $16.0 million
• Adjusted EBITDA of $32.1 million (+5.3% from 2019)
• Uncertainty related to future impact of COVID-19 results in withdrawal of 2020 guidance

"Nesco experienced solid growth in the first quarter across all segments, resulting in our 15th consecutive quarter of year-over-year Adjusted EBITDA growth," said Lee Jacobson, Chief Executive Officer of Nesco. "We were impacted by COVID-19 in the final month of the quarter, but we still experienced more than 5% equipment rental revenue growth in the first quarter, excluding growth from Truck Utilities. Parts, tools and accessories segment revenue also increased more than 14% in the first quarter, excluding Truck Utilities."

"The electric transmission and distribution, telecom and rail infrastructure end markets Nesco serves are considered critical infrastructure markets according to CISA guidelines, deeming our business operations essential. All our business and service locations remain operational, but we have taken steps intended to maintain the health and safety of our employees and customers. Especially during this time of increased social distancing, Nesco benefits from the fact that none of our service locations across the country require in-person contact or have a staffed sales team because we do not have a store front sales model – while they have reduced in person meetings, Nesco's sales team can effectively do business the same way they always have. Nesco is proud to provide essential services to our critical end markets, and we believe serving these markets will result in a reduced relative business impact from the pandemic compared to businesses that primarily serve construction, oil or industrial end markets. While most existing projects have continued due to their essential status, many of the new utility and telecom projects that typically start in the spring of each year have been delayed due to COVID-19 social distancing measures, leading to a reduced level of equipment on rent as existing projects wrap up. In addition, PTA sales, which are driven in large part by new project starts, have been impacted. We are actively monitoring the situation and have already taken steps to mitigate the impact of the virus on our business by reducing remaining capital spending where practicable as well as enacting cost cutting measures."

For earnings history and earnings-related data on Nesco Holdings, Inc. (NSCO) click here.

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