H&E Equipment Services Reports Fourth Quarter 2020 and Full Year 2020 Results

February 17, 2021 7:00 AM EST

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BATON ROUGE, La.--(BUSINESS WIRE)-- H&E Equipment Services, Inc. (NASDAQ: HEES) today announced results for the fourth quarter and year ended December 31, 2020. In the fourth quarter of 2020, the Company completed its successful offering of new 8-year 3.875% senior notes (the “New Notes”) and the repurchase and redemption of its previously outstanding 5.6250% senior notes (the “Old Notes”). The Company’s operating results for this quarter include a $44.6 million non-recurring item associated with the premiums paid to repurchase and redeem the Old Notes and the write-off of unaccreted note discount, unamortized note premium and deferred transaction costs associated therewith.

FOURTH QUARTER 2020 SUMMARY

  • Revenues decreased 9.3% to $315.6 million versus $348.1 million a year ago.
  • Included in fourth quarter 2020 net income was a $44.6 million pre-tax loss on early extinguishment of debt. Included in fourth quarter 2019 net income was a $12.2 million pre-tax non-cash goodwill impairment charge. Net loss was $(14.6) million in the fourth quarter of 2020 compared to net income of $21.9 million a year ago. Excluding the impact of the aforementioned items from each of the respective years, adjusted net income was $16.6 million in the fourth quarter of 2020 compared to adjusted net income of $31.9 million a year ago. The effective income tax rate was 37.0% in the fourth quarter of 2020 and 18.4% in the fourth quarter of 2019.
  • Adjusted EBITDA decreased 19.8% to $101.6 million in the fourth quarter of 2020 compared to $126.8 million a year ago, yielding a margin of 32.2% of revenues compared to 36.4% a year ago.
  • Total equipment rental revenues for the fourth quarter of 2020 were $166.8 million, a decrease of $27.0 million, or 13.9%, compared to $193.8 million a year ago. Rental revenues for the fourth quarter of 2020 were $149.6 million, a decrease of approximately $26.6 million, or 15.1%, compared to $176.3 million in the fourth quarter of 2019.
  • New equipment sales decreased 10.3% to $55.1 million in the fourth quarter of 2020 compared to $61.4 million a year ago.
  • Used equipment sales increased 13.0% to $47.9 million in the fourth quarter of 2020 compared to $42.4 million a year ago.
  • Gross margin was 33.6% compared to 36.9% a year ago. The decrease in gross margin was largely the result of lower rental gross margins and revenue mix.
  • Total equipment rental gross margins were 40.3% in the fourth quarter of 2020 compared to 45.6% a year ago. Rental gross margins were 45.1% in the fourth quarter of 2020 compared to 50.3% last year. The decrease was primarily due to lower time utilization and rates.
  • Average time utilization (based on original equipment cost) was 65.4% compared to 69.0% a year ago. The size of the Company’s rental fleet based on original acquisition cost decreased 9.2% from a year ago, to $1.8 billion.
  • Average rental rates decreased 4.5% compared to a year ago and declined 0.3% sequentially, based on ARA guidelines.
  • Dollar utilization was 33.5% in the fourth quarter of 2020 compared to 36.0% a year ago.
  • Average rental fleet age at December 31, 2020, was 40.9 months compared to an industry average age of 51.7 months.
  • Successful notes offering of $1.25 billion of new 8-year 3.875% senior notes. Proceeds were used primarily to repurchase or redeem our previously outstanding 5.6250% senior notes, to pay fees and expenses in connection with the offering and otherwise for general corporate purposes.

Brad Barber, H&E Equipment Services, Inc.’s chief executive officer, said, “Our fourth quarter performance reaffirmed our beliefs regarding the ongoing improvement in our business. Demand in our end-user rental markets remained good and physical utilization increased sequentially from the third quarter. Our distribution business also delivered better-than-expected results. We are encouraged with the current trends and visibility as we move into 2021.”

Barber added, “In terms of our financial highlights for the quarter, total revenues were down 9.3%, or $32.5 million, compared to a year ago. Adjusted EBITDA decreased 19.8%, or $25.2 million, from a year ago, and margins were down 420 basis points to 32.2%. While our revenues remain below pre-pandemic levels, we were pleased that the year-over-year declines improved. We also generated significant free cash flow again this quarter.”

Barber concluded, “With our successful upsized notes offering during the fourth quarter, our balance sheet is strong and will certainly support the acceleration of the growth initiatives we outlined last quarter. From an organic perspective, we are significantly increasing the number of warm starts across our footprint to improve our density in high-growth regions. Additional growth is expected from tuck-in acquisitions of general rental businesses. We are also focused on entering the specialty rental business with opportunities that would be synergistic with our current lines of business and fleet mix. Throughout our 60 years in business, we have always been about equipment solutions, strategically growing our product lines and the ability to serve an increasing base of customers. We are ramping up this commitment in 2021.”

FINANCIAL DISCUSSION FOR FOURTH QUARTER 2020:

Revenue

Total revenues decreased 9.3% to $315.6 million in the fourth quarter of 2020 from $348.1 million in the fourth quarter of 2019. Total equipment rental revenues decreased 13.9% to $166.8 million compared to $193.8 million in the fourth quarter of 2019. Rental revenues decreased 15.1% to $149.6 million compared with $176.3 million in the fourth quarter of 2019. New equipment sales decreased 10.3% to $55.1 million compared to $61.4 million a year ago. Used equipment sales increased 13.0% to $47.9 million compared to $42.4 million a year ago. Parts sales decreased 11.0% to $26.8 million compared to $30.1 million a year ago. Service revenues decreased 8.0% to $16.1 million compared to $17.5 million a year ago.

Gross Profit

Gross profit decreased 17.6% to $106.0 million from $128.6 million in the fourth quarter of 2019. Gross margin was 33.6% for the fourth quarter ended December 31, 2020, as compared to 36.9% for the fourth quarter ended December 31, 2019. On a segment basis, gross margin on total equipment rentals was 40.3% in the fourth quarter of 2020 compared to 45.6% in the fourth quarter of 2019. Rental margins were 45.1% in the fourth quarter of 2020 compared to 50.3% last year. On average, rental rates were 4.5% lower than rates in the fourth quarter of 2019. Time utilization (based on original equipment cost) was 65.4% in the fourth quarter of 2020 compared to 69.0% a year ago.

Gross margins on new equipment sales were 10.5% in the fourth quarter compared to 10.8% a year ago. Gross margins on used equipment sales were 31.1% compared to 33.3% a year ago. Gross margins on parts sales were 25.3% in the fourth quarter of 2020 compared to 26.1% a year ago. Gross margins on service revenues were 67.4% for the fourth quarter of 2020 compared to 67.6% in the fourth quarter of 2019.

Rental Fleet

At the end of the fourth quarter of 2020, the original acquisition cost of the Company’s rental fleet was $1.8 billion, which is a 9.2%, or $179.1 million, decrease from the end of the fourth quarter of 2019. Dollar utilization for the fourth quarter of 2020 was 33.5% compared to 36.0% for the fourth quarter of 2019.

Selling, General and Administrative Expenses

SG&A expenses for the fourth quarter of 2020 were $71.7 million compared with $77.2 million the prior year, a $5.5 million, or 7.1%, decrease. SG&A expenses in the fourth quarter of 2020 as a percentage of total revenues were 22.7% compared to 22.2% a year ago. Employee salaries, wages, payroll taxes and related employee benefits, and other employee related expenses decreased $5.0 million, primarily as a result of lower commissions and incentive pay combined with headcount reductions. Bad debt expense decreased $1.2 million and promotional expenses decreased $0.9 million. Offsetting this decrease was a $1.8 million increase in liability insurance expense. Expenses related to Greenfield branch expansions increased $1.7 million compared to a year ago.

Income from Operations

Income from operations for the fourth quarter of 2020 was $35.8 million, or 11.3% of revenues, compared to income from operations of $41.3 million, or 11.9% of revenues, a year ago. Included in income from operations for the fourth quarter of 2019 was a $12.2 million non-cash goodwill impairment charge. Excluding this charge, adjusted income from operations was $53.5 million, or 15.4% of revenues, a year ago.

Interest Expense

Interest expense was $15.3 million for the fourth quarter of 2020 compared to $16.8 million a year ago.

Net Income (Loss)

Net loss was $(14.6) million, or $(0.40) per diluted share, in the fourth quarter of 2020 compared to net income of $21.9 million, or $0.61 per diluted share, in the fourth quarter of 2019. Excluding the impact of the nonrecurring item of $44.6 million associated with the repurchase and redemption of the Old Notes in the fourth quarter of this year and the $12.2 million goodwill impairment charge in the fourth quarter of last year, adjusted net income was $16.6 million, or $0.46 per diluted share, this year compared to adjusted net income of $31.9 million, or $0.88 per diluted share, a year ago. The effective income tax rate was 37.0% in the fourth quarter of 2020 and 18.4% in the fourth quarter of 2019. On an adjusted basis, the effective tax rate was 22.3% in the fourth quarter of 2020 and 18.4% in the fourth quarter of 2019.

Adjusted EBITDA

Adjusted EBITDA for the fourth quarter of 2020 decreased 19.8% to $101.6 million compared to $126.8 million in the fourth quarter of 2019. Adjusted EBITDA as a percentage of revenues was 32.2% compared with 36.4% in the fourth quarter of 2019.

FINANCIAL DISCUSSION FOR THE YEAR ENDED DECEMBER 31, 2020:

A non-cash goodwill impairment charge of $62.0 million was identified during the first quarter of 2020 in connection with an interim goodwill impairment test necessitated by our identification of certain impairment triggering events associated with the impact to our business from the COVID-19 pandemic. The Company’s results also include a fourth quarter $44.6 million non-recurring item associated with the premiums paid to repurchase and redeem the Old Notes and the write-off of unaccreted discount, unamortized premium and deferred transaction costs.

Revenue

Total revenues decreased 13.3%, or $179.2 million, to $1.2 billion in 2020 from $1.3 billion in 2019. Total equipment rental revenues decreased 13.5% to $663.0 million compared to $766.4 million in 2019. Rental revenues decreased 13.8% to $598.4 million compared to $694.5 million in 2019. New equipment sales decreased 30.1% to $167.1 million from $239.1 million a year ago. Used equipment sales increased 9.9% to $153.2 million compared to $139.3 million a year ago. Parts sales decreased 10.7% to $110.6 million from $123.9 million in 2019. Service revenues decreased 5.4% to $64.3 million from $67.9 million a year ago.

Gross Profit

Gross profit decreased 19.3%, or $96.6 million, to $402.6 million in 2020 from $499.2 million in 2019. Gross margin was 34.4% for 2020 compared to 37.0% for 2019. On a segment basis, gross margin on total equipment rentals was 39.8% compared to 45.3% in 2019. Rental margins were 44.2% compared to 49.8% a year ago. On average, 2020 rental rates decreased 2.6% compared to 2019. In 2020, time utilization (based on original equipment cost) was 63.2% compared to 70.4% a year ago.

Gross margins on new equipment sales were 10.8% compared to 11.6% a year ago. Gross margins on used equipment sales were 31.7% compared to 34.0% a year ago. Gross margins on parts sales were 25.7% compared to 26.6% a year ago. Gross margins on service revenues were 67.0% in 2020 from 67.7% in 2019.

Selling, General and Administrative Expenses

SG&A expenses for 2020 were $289.3 million compared with $311.0 million in 2019, a decrease of $21.8 million, or 7.0%. In 2020, SG&A expenses as a percentage of total revenues were 24.7% compared to 23.1% a year ago. The decrease in SG&A expenses was attributable to several factors. Employee salaries, wages, payroll taxes, related employee benefits costs and other employee expenses decreased $22.2 million primarily as a result of lower compensation and incentive pay combined with headcount reductions and reduced employee hours in response to COVID-19’s impact to our business. Promotional expenses decreased $2.1 million. Bad debt expense decreased $1.7 million and supplies expense decreased $1.2 million. Non-real estate lease operating expenses decreased $1.5 million and fuel and utilities costs decreased $0.7 million. These decreases were partially offset by a $6.4 million increase in liability insurance costs, a $0.7 million increase in depreciation and amortization expenses and a $0.6 million increase in legal and professional fees expenses. Expenses related to Greenfield branch expansions increased $4.4 million compared to a year ago.

Income from Operations

Income from operations for 2020 was $61.8 million, or 5.3% of revenues, compared to income from operations of $180.2 million, or 13.4% of revenues, a year ago. Included in income from operations in 2020 was a first quarter non-cash goodwill impairment charge of $62.0 million. Included in income from operations in 2019 was a fourth quarter non-cash goodwill impairment charge of $12.2 million. Excluding these charges in both years, adjusted income from operations in 2020 was $123.8 million, or 10.6% of revenues, compared to adjusted income from operations of $192.3 million, or 14.3% of revenues, in 2019.

Interest Expense

Interest expense in 2020 was $61.8 million, a $6.5 million decrease from $68.3 million a year ago.

Net Income (Loss)

Net loss was $(32.7) million, or $(0.91) per diluted share, compared to net income of $87.2 million, or $2.42 per diluted share, in 2019. Excluding the impact of the 2020 first quarter goodwill impairment charge of $62.0 million and the 2020 fourth quarter nonrecurring item of $44.6 million associated with the repurchase and redemption of the Old Notes, adjusted net income in 2020 was $50.1 million, or $1.39 per diluted share. Excluding the $12.2 million goodwill impairment charge in the fourth quarter of 2019, adjusted net income was $96.4 million, or $2.67 per diluted share, in 2019. The effective income tax rate was 21.1% in 2020 compared to 24.7% in 2019. On an adjusted basis, our effective tax rate for the twelve month periods ended December 31, 2020 and 2019 was 23.1% and 24.7%, respectively.

Adjusted EBITDA

Adjusted EBITDA for 2020 decreased 16.6% to $394.8 million from $473.2 million in 2019. Adjusted EBITDA as a percentage of revenues was 33.8% compared with 35.1% in 2019.

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. Please refer to our Current Report on Form 8-K for a description of these measures and of our use of these measures. These measures as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures are not a measurement of financial performance or liquidity under GAAP and should not be considered as alternatives to the Company's other financial information determined under GAAP.

Conference Call

The Company’s management will hold a conference call to discuss fourth quarter and full-year 2020 results today, February 17, 2021 at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 877-270-2148 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 17, 2021, and will continue through February 24, 2021, by dialing 877-344-7529 and entering the confirmation code 10151995.

The live broadcast of H&E Equipment Services, Inc.’s quarterly conference call will be available online at www.he-equipment.com on February 17, 2021, beginning at 10:00 a.m. (Eastern Time) and will continue to be 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.

The Company is one of the largest integrated equipment services companies in the United States with 97 full-service facilities throughout the West Coast, Intermountain, Southwest, Gulf Coast, Mid-Atlantic and Southeast regions. The Company is focused on heavy construction and industrial equipment, and rents, sells, and provides parts and services support for four core categories of specialized equipment: (1) hi-lift or aerial platform equipment; (2) cranes; (3) earthmoving equipment; and (4) material handling equipment. By providing equipment rental, sales, on site parts, repair services, and maintenance functions under one roof, the Company is a one-stop provider for its customers' varied equipment needs. This full service approach provides the Company with multiple points of customer contact, enabling it to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal, and provides cross-selling opportunities among its new and used equipment sales, rentals, parts sales, and services operations.

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) risks related to the impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response, material delays and cancellations of construction or infrastructure projects, supply chain disruptions and other impacts to the business; (2) general economic conditions and construction and industrial activity in the markets where we operate in North America; (3) our ability to forecast trends in our business accurately, and the impact of economic downturns and economic uncertainty in the markets we serve (including as a result of current uncertainty due to COVID-19); (4) trends in oil and natural gas could adversely affect the demand for our services and products; (5) the impact of conditions in the global credit and commodity markets (including as a result of current volatility and uncertainty in credit and commodity markets due to COVID-19) and their effect on construction spending and the economy in general; (6) relationships with equipment suppliers; (7) increased maintenance and repair costs as we age our fleet and decreases in our equipment’s residual value; (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 inability to consummate such acquisitions; (10) our possible inability to integrate any businesses we acquire; (11) competitive pressures; (12) security breaches and other disruptions in our information technology systems; (13) adverse weather events or natural disasters; (14) 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 (15) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K and the Company’s most recent Quarterly Report on Form 10-Q. 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 Securities and Exchange Commission, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release. 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. H&E is under no obligation to publicly update or revise any forward-looking statements after this press release, whether as a result of any new information, future events or otherwise. 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 OPERATIONS (unaudited)

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

Three Months Ended

 

Twelve Months Ended

 

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

 

Dec. 31,

 

 

2020

 

2019

 

2020

 

2019

Revenues:

 

 

 

 

 

 

 

 

Equipment rentals

$

166,831

 

$

193,791

 

$

662,993

 

$

766,354

 

New equipment sales

 

55,062

 

 

61,382

 

 

167,130

 

 

239,091

 

Used equipment sales

 

47,921

 

 

42,407

 

 

153,152

 

 

139,349

 

Parts sales

 

26,752

 

 

30,057

 

 

110,594

 

 

123,855

 

Service revenues

 

16,137

 

 

17,543

 

 

64,253

 

 

67,941

 

Other

 

2,899

 

 

2,953

 

 

10,998

 

 

11,775

 

Total revenues

 

315,602

 

 

348,133

 

 

1,169,120

 

 

1,348,365

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

Equipment rentals

 

 

 

 

 

 

 

 

Rental depreciation

 

56,584

 

 

62,133

 

 

233,809

 

 

243,780

 

Rental expense

 

25,597

 

 

25,403

 

 

100,058

 

 

105,079

 

Rental other

 

17,347

 

 

17,871

 

 

65,194

 

 

70,613

 

 

 

99,528

 

 

105,407

 

 

399,061

 

 

419,472

 

New equipment sales

 

49,257

 

 

54,734

 

 

149,066

 

 

211,372

 

Used equipment sales

 

32,998

 

 

28,279

 

 

104,590

 

 

92,021

 

Parts sales

 

19,975

 

 

22,213

 

 

82,155

 

 

90,963

 

Service revenues

 

5,265

 

 

5,685

 

 

21,176

 

 

21,946

 

Other

 

2,580

 

 

3,254

 

 

10,453

 

 

13,421

 

Total cost of revenues

 

209,603

 

 

219,572

 

 

766,501

 

 

849,195

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

105,999

 

 

128,561

 

 

402,619

 

 

499,170

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

71,739

 

 

77,243

 

 

289,264

 

 

311,026

 

Merger costs

 

195

 

 

102

 

 

503

 

 

416

 

Gain on sales of property and equipment, net

 

(1,706

)

 

(2,278

)

 

(10,966

)

 

(4,617

)

Impairment of goodwill

 

 

 

12,184

 

 

61,994

 

 

12,184

 

 

 

 

 

 

 

 

 

 

Income from Operations

 

35,771

 

 

41,310

 

 

61,824

 

 

180,161

 

 

 

 

 

 

 

 

 

 

Loss on early extinguishment of debt

 

(44,630

)

 

 

 

(44,630

)

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

(15,301

)

 

(16,824

)

 

(61,790

)

 

(68,277

)

Other income, net

 

948

 

 

2,368

 

 

3,210

 

 

3,977

 

Income (loss) before provision (benefit) for income taxes

 

(23,212

)

 

26,854

 

 

(41,386

)

 

115,861

 

 

 

 

 

 

 

 

 

 

Provision (benefit) for income taxes

 

(8,595

)

 

4,931

 

 

(8,719

)

 

28,650

 

 

 

 

 

 

 

 

 

 

Net Income (Loss)

$

(14,617

)

$

21,923

 

$

(32,667

)

$

87,211

 

 

 

 

 

 

 

 

 

 

NET INCOME (LOSS) PER SHARE:

 

 

 

 

 

 

 

 

Basic – Net income (loss) per share

$

(0.40

)

$

0.61

 

$

(0.91

)

$

2.43

 

Basic – Weighted average number of common shares outstanding

 

36,161

 

 

35,930

 

 

36,067

 

 

35,859

 

Diluted – Net income (loss) per share

$

(0.40

)

$

0.61

 

$

(0.91

)

$

2.42

 

Diluted – Weighted average number of

common shares outstanding

 

36,161

 

 

36,098

 

 

36,067

 

 

36,033

 

Dividends declared per common share

$

0.275

 

$

0.275

 

$

1.10

 

$

1.10

 

 

 

H&E EQUIPMENT SERVICES, INC.

SELECTED BALANCE SHEET DATA (unaudited)

(Amounts in thousands)

 

 

 

December 31,

 

 

December 31,

 

 

2020

 

 

2019

Cash

$

310,882

 

$

14,247

Rental equipment, net

 

1,028,745

 

 

1,217,673

Total assets

 

1,980,484

 

 

1,974,610

Total debt (1)

 

1,250,305

 

 

1,167,429

Total liabilities

 

1,742,251

 

 

1,667,091

Stockholders’ equity

 

238,233

 

 

307,519

Total liabilities and stockholders’ equity

$

1,980,484

 

$

1,974,610

(1)

Total debt consists of the aggregate amounts outstanding on the senior unsecured notes and finance lease obligations.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

Three Months Ended December 31,

 

2020

 

2020

 

As Reported

Adjustment

As Adjusted

 

 

 

 

Gross profit

$

105,999

 

 

$

105,999

 

Selling, general and administrative expenses

 

71,739

 

 

 

71,739

 

Gain on sale of property and equipment, net

 

(1,706

)

 

 

(1,706

)

Merger costs

 

195

 

 

 

195

 

Income from operations

 

35,771

 

 

 

35,771

 

Loss on early extinguishment of debt

 

(44,630

)

 

44,630

 

 

Interest expense

 

(15,301

)

 

 

(15,301

)

Other income, net

 

948

 

 

 

948

 

Income (loss) before provision (benefit) for income taxes

 

(23,212

)

 

44,630

 

21,418

 

Provision (benefit) for income taxes

 

(8,595

)

 

13,380

 

4,785

 

Net income (loss)

$

(14,617

)

$

31,250

$

16,633

 

 

 

 

 

 

 

Three Months Ended December 31,

 

2020

 

2020

 

As Reported

Adjustment

As Adjusted

 

 

 

 

NET INCOME (LOSS) PER SHARE (1)

 

 

 

Basic – Net income (loss) per share

$

(0.40

)

$

0.86

$

0.46

 

Basic – Weighted average number of common shares outstanding

36,161

 

36,161

36,161

 

Diluted – Net income (loss) per share

$

(0.40

)

$

0.86

$

0.46

 

Diluted – Weighted average number of common shares outstanding

36,161

36,300

36,300

(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, except per share amounts)

 

 

 

Twelve Months Ended December 31,

 

2020

 

2020

 

As Reported

Adjustments

As Adjusted

 

 

 

 

Gross profit

$

402,619

 

 

 

$

402,619

 

Selling, general and administrative expenses

 

289,264

 

 

 

 

289,264

 

Impairment of goodwill

 

61,994

 

 

(61,994

)

 

 

Gain on sale of property and equipment, net

 

(10,966

)

 

 

 

(10,966

)

Merger costs

 

503

 

 

 

 

503

 

Income from operations

 

61,824

 

 

61,994

 

 

123,818

 

Loss on early extinguishment of debt

 

(44,630

)

 

44,630

 

 

 

Interest expense

 

(61,790

)

 

 

 

(61,790

)

Other income, net

 

3,210

 

 

 

 

3,210

 

Income (loss) before provision (benefit) for income taxes

 

(41,386

)

 

106,624

 

 

65,238

 

Provision (benefit) for income taxes

 

(8,719

)

 

23,809

 

 

15,090

 

Net income (loss)

$

(32,667

)

$

82,815

 

$

50,148

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

2020

 

2020

 

As Reported

Adjustments

As Adjusted

 

 

 

 

NET INCOME (LOSS) PER SHARE (1)

 

 

 

Basic – Net income (loss) per share

$

(0.91

)

$

2.30

 

$

1.39

 

Basic – Weighted average number of common shares outstanding

36,067

36,067

36,067

Diluted – Net income (loss) per share

$

(0.91

)

$

2.29

 

$

1.39

 

Diluted – Weighted average number of common shares outstanding

36,067

36,185

36,185

(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, except per share amounts)

 

 

 

Three Months Ended December 31,

 

2019

 

2019

 

As Reported

Adjustment

As Adjusted

 

 

 

 

Gross profit

$

128,561

 

 

 

$

128,561

 

Selling, general and administrative expenses

 

77,243

 

 

 

 

77,243

 

Impairment of goodwill

 

12,184

 

 

(12,184

)

 

 

Gain on sale of property and equipment, net

 

2,278

 

 

 

 

2,278

 

Merger costs

 

102

 

 

 

 

102

 

Income from operations

 

41,310

 

 

12,184

 

 

53,494

 

Interest expense

 

(16,824

)

 

 

 

(16,824

)

Other income, net

 

2,368

 

 

 

 

2,368

 

Income before provision for income taxes

 

26,854

 

 

12,184

 

 

39,038

 

Provision for income taxes

 

4,931

 

 

2,237

 

 

7,168

 

Net income

$

21,923

 

$

9,947

 

$

31,870

 

 

 

 

 

 

 

Three Months Ended December 31,

 

2019

 

2019

 

As Reported

Adjustment

As Adjusted

 

 

 

 

NET INCOME PER SHARE(1)

 

 

 

Basic – Net income per share

$

0.61

 

$

0.28

 

$

0.89

 

Basic – Weighted average number of common shares outstanding

35,930

35,930

35,930

Diluted – Net income per share

$

0.61

 

$

0.28

 

$

0.88

 

Diluted – Weighted average number of common shares outstanding

36,098

36,098

36,098

(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, except per share amounts)

 

 

 

Twelve Months Ended December 31,

 

2019

 

2019

 

As Reported

Adjustment

As Adjusted

 

 

 

 

Gross profit

$

499,170

 

 

 

$

499,170

 

Selling, general and administrative expenses

 

311,026

 

 

 

 

311,026

 

Impairment of goodwill

 

12,184

 

 

(12,184

)

 

 

Gain on sale of property and equipment, net

 

4,617

 

 

 

 

4,617

 

Merger costs

 

416

 

 

 

 

416

 

Income from operations

 

180,161

 

 

12,184

 

 

192,345

 

Interest expense

 

(68,277

)

 

 

 

(68,277

)

Other income, net

 

3,977

 

 

 

 

3,977

 

Income before provision for income taxes

 

115,861

 

 

12,184

 

 

128,045

 

Provision for income taxes

 

28,650

 

 

3,013

 

 

31,663

 

Net income

$

87,211

 

$

9,171

 

$

96,382

 

 

 

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

2019

 

2019

 

As Reported

Adjustment

As Adjusted

 

 

 

 

NET INCOME PER SHARE(1)

 

 

 

Basic – Net income per share

$

2.43

 

$

0.26

 

$

2.69

 

Basic – Weighted average number of common shares outstanding

35,859

35,859

35,859

Diluted – Net income per share

$

2.42

 

$

0.25

 

$

2.67

 

Diluted – Weighted average number of common shares outstanding

36,033

36,033

36,033

(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,

 

2020

2019

2020

2019

 

 

 

 

 

 

 

 

 

Net Income (loss)

$

(14,617

)

$

21,923

$

(32,667

)

$

87,211

Interest Expense

 

15,301

 

 

16,824

 

61,790

 

 

68,277

Provision (benefit) for income taxes

 

(8,595

)

 

4,931

 

(8,719

)

 

28,650

Depreciation

 

63,696

 

 

69,758

 

263,330

 

 

272,368

Amortization of intangibles

 

991

 

 

1,041

 

3,987

 

 

4,132

 

 

 

 

 

 

 

 

 

EBITDA

$

56,776

 

$

114,477

$

287,721

 

$

460,638

 

 

 

 

 

 

 

 

 

Merger costs

 

195

 

 

102

 

503

 

 

416

Loss on early extinguishment of debt

 

44,630

 

 

 

44,630

 

 

–-

Impairment of goodwill

 

 

 

12,184

 

61,994

 

 

12,184

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

101,601

 

$

126,763

$

394,848

 

$

473,238

 

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

Three Months Ended

Twelve Months Ended

 

Dec. 31, 2020

Dec. 31, 2019

Dec. 31, 2020

Dec. 31, 2019

RENTAL REVENUES

 

 

 

 

 

 

 

 

Equipment rentals (1)

$

149,608

$

176,253

$

598,425

$

694,547

Rentals other

 

17,223

 

17,538

 

64,568

 

71,807

Total equipment rentals

 

166,831

 

193,791

 

662,993

 

766,354

 

 

 

 

 

 

 

 

 

RENTAL COST OF SALES

 

 

 

 

 

 

 

 

Rental depreciation

 

56,584

 

62,133

 

233,809

 

243,780

Rental expense

 

25,597

 

25,403

 

100,058

 

105,079

Rental other

 

17,347

 

17,871

 

65,194

 

70,613

Total rental cost of sales

 

99,528

 

105,407

 

399,061

 

419,472

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS PROFIT (LOSS)

 

 

 

 

 

 

 

 

Equipment rentals

 

67,427

 

88,717

 

264,558

 

345,688

Rentals other

 

(124)

 

(333)

 

(626)

 

1,194

Total rental revenues gross profit

 

67,303

88,384

263,932

346,882

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS MARGIN

 

 

 

 

 

 

 

 

Equipment rentals

 

45.1%

 

50.3%

 

44.2%

 

49.8%

Rentals other

 

-0.7%

 

-1.9%

 

-1.0%

 

1.7%

Total rental revenues gross margin

 

40.3%

 

45.6%

 

39.8%

 

45.3%

 

(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.

 

Leslie S. Magee
Chief Financial Officer
225-298-5261
lmagee@he-equipment.com

Kevin S. Inda
Vice President of Investor Relations
225-298-5318
kinda@he-equipment.com

Source: H&E Equipment Services, Inc.



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