Nesco Holdings, Inc. (NSCO) Misses Q2 EPS by 20c, Revenues Miss

Nesco Holdings, Inc. (NYSE: NSCO) reported Q2 EPS of ($0.27), $0.20 worse than the analyst estimate of ($0.07). Revenue for the quarter came in at $68.48 million versus the consensus estimate of $86.5 million.

SECOND QUARTER 2020 HIGHLIGHTS

All metrics compared to Second Quarter 2019 unless otherwise noted

• Total revenue increased 9.0% to $68.5 million
• Equipment Rental and Sales (ERS) segment revenue decreased 0.5% to $53.4 million
• Parts, Tools and Accessories (PTA) segment revenue increased 64.1% to $15.1 million
• Adjusted EBITDA decreased 14.1% to $26.2 million
• Net loss increased to $13.2 million from $5.4 million
• Free cash flow increased to $14.4 million from negative $27.6 million
• Available liquidity of $83.6 million

MANAGEMENT COMMENTARY

"Our second quarter results reflect the resiliency and sustainability of both our critical infrastructure markets and our business model," said Lee Jacobson, Chief Executive Officer of Nesco. "Given the unprecedented economic environment, we are encouraged with our second quarter results and exceptionally proud of our dedicated team members for their tireless efforts. We continue to prioritize our team's health and safety while delivering for our customers during this challenging period and have streamlined our business operations and reduced overhead as a result of the temporary slowdown in activity. We are focused on driving free cash flow to ensure ample liquidity to navigate through the pandemic."

"We remain disciplined in our working capital management and curtailed capital expenditures in the latter part of the second quarter, which helped drive $14.4 million of free cash flow in the second quarter," said Josh Boone, Chief Financial Officer of Nesco. "Our flexible business model, combined with the investments made in 2019 and the first quarter of 2020 to expand our fleet, position us to capitalize on a typically stronger back half of the year, which we expect to be bolstered by projects that were temporarily put on hold due to the pandemic. Additionally, we have over $80 million of available liquidity with no near-term debt maturities and expect to generate free cash flow for the remainder of 2020. We are in a comfortable financial position that provides flexibility to support continued growth in the business and reduce leverage. We remain committed to a long-term leverage target of 3.0x-3.5x."

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

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