Herc Holdings (NYSE: HRI) reported Q1 EPS of $0.04, $0.25 better than the analyst estimate of ($0.21). Revenue for the quarter came in at $436.2 million versus the consensus estimate of $464.48 million.

• Equipment rental revenue in the first quarter of 2020 increased 2.4% to $386.5 million compared to $377.6 million in the prior-year quarter. Strong year-over-year improvement in pricing was partially offset by lower volume, as the impact of COVID-19 related orders began to slow the typical upturn in seasonal volume in mid-March.
• Total revenues were $436.2 million in the first quarter of 2020 compared to $475.7 million in the prior-year period. The $39.5 million decline was related primarily to a reduction in sales of rental equipment of $45.1 million, and $3.9 million reduction in sales of new equipment, parts and supplies compared to the prior year. Those reductions were partially offset by an increase in equipment rental revenue of $8.9 million.
• Pricing increased 2.4% in the first quarter of 2020 compared to the same period in 2019.
• Dollar utilization increased to 35.7% in the first quarter of 2020, a slight improvement compared to the prior-year period, primarily reflecting improved pricing and fleet mix.
• Direct operating expenses (DOE) of $189.2 million in the first quarter of 2020 were flat compared to the prior-year period. The $0.1 million increase was primarily related to lower transportation and maintenance costs which were offset by higher personnel and facilities costs.
• Selling, general and administrative expenses (SG&A) decreased 2.4% to $69.8 million in the first quarter of 2020 compared to $71.5 million in the prior-year period. The $1.7 million decline was primarily attributed to the reduction in professional fees in the quarter and offset by an increase in bad debt expense.
• Impairment expense was $6.3 million during the first quarter related to the partial impairment of a long-term receivable related to the sale of our former joint venture.
• Interest expense in the first quarter of 2020 decreased to $24.4 million compared to $32.9 million in the prior-year period. The decrease was primarily related to lower interest expense on the Company's Senior Notes and lower average outstanding balances on the Company's ABL Credit Facility.
• Income tax provision in the first quarter was $1.1 million compared with a benefit of $3.1 million for the same period last year.
• The Company reported a net loss of $3.7 million in the first quarter of 2020 compared to $6.7 million in the prior-year period. Adjusted net income was $1.1 million compared to an adjusted net loss of $6.5 million in the prior-year quarter.
• Adjusted EBITDA in the first quarter of 2020 increased 3.8% to $147.7 million compared to $142.3 million in the prior-year period. The increase was primarily due to strong equipment rental revenue pricing and lower SG&A expenses, partially offset by lower sales of rental equipment.
• Adjusted EBITDA margin increased 400 basis points to 33.9% in the first quarter of 2020, compared with 29.9% in the prior-year quarter.

"Equipment rental revenue improved year-over-year in the first quarter primarily due to positive rate growth," said Larry Silber, president and chief executive officer. "We controlled direct operating expenses and reduced selling, general and administrative expenses compared with last year, contributing to our growth in adjusted EBITDA and a 400 basis point improvement in adjusted EBITDA margin in the first quarter."

"In response to the onset of the COVID-19 pandemic in North America, we communicated and implemented safety and operating procedures based on the Centers for Disease Control and Prevention's guidelines to our employees and customers. We are proud to be providing essential support to customers in a diverse mix of critical infrastructure sectors and nearly all of our branches are open and operating. Our ProSolutions® team has been especially busy providing critical support to medical centers, hospitals and additional patient facilities. Our foremost priorities are the health and safety of our team, customers and communities, while supporting the needs of critical services and operations throughout North America," Silber said.

Outlook for the Year

"We have cut variable costs and taken steps to substantially reduce our capital expenditures to conserve capital. As of the end of the first quarter, we had ample liquidity of $1.1 billion. These unprecedented times make it difficult to predict the length of the economic slowdown related to the COVID-19 pandemic or the full impact on our business. As a result, we are withdrawing our 2020 guidance. Nonetheless, we believe the steps we have taken provide ample liquidity to fund our business in 2020 and beyond," Silber said.

"I am proud of the 'can do' attitude of our Herc Rentals team as we work to navigate this challenging time together. Our business model is resilient and our leadership team is experienced. We remain ready to support our customers' operations in whatever capacity we can during this uncertain time and especially when construction and business activities resume. We thank all of our team members for their professionalism and dedication in serving our customers and communities. Working together, we will emerge stronger and better."

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