Core Viewpoint - Herc Holdings Inc. and H&E Equipment Services, Inc. have completed a tender offer for H&E Shares as part of a merger agreement, with the acquisition expected to close on June 2, 2025 [1][3]. Group 1: Tender Offer Details - The tender offer expired on May 29, 2025, with 25,369,090 H&E Shares validly tendered, representing approximately 69.33% of the outstanding shares [2]. - All conditions to the tender offer have been satisfied or waived, and the tendered shares will be accepted for payment [2]. Group 2: Merger Completion - The acquisition is anticipated to close on June 2, 2025, at which point H&E will become a wholly-owned subsidiary of Herc [3][4]. - Following the merger, H&E Shares will cease trading on the Nasdaq Stock Market [4]. Group 3: Company Profiles - Herc Holdings Inc. operates through Herc Rentals Inc. and has 453 locations across North America, with total revenues of approximately $3.6 billion in 2024 [5]. - H&E Equipment Services, Inc. is one of the largest rental equipment companies in the U.S., serving diverse end markets across various high-growth geographies [6].

Core Viewpoint - H&E Equipment Services, Inc. has decided not to declare a regular quarterly cash dividend for June 2025 due to ongoing progress with its merger with Herc Holdings, Inc., expected to close in early June 2025 [1] Company Overview - H&E Equipment Services, Inc. is one of the largest rental equipment companies in the United States, founded in 1961 [2] - The company's fleet includes aerial work platforms, earthmoving, material handling, and other general and specialty lines [2] - H&E serves diverse end markets across high-growth geographies with branches throughout various regions including the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest, and Mid-Atlantic [2]

[PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's unaudited condensed consolidated financial statements and management's discussion and analysis for the quarter [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, detailing a net loss, reduced revenues, improved operating cash flow, and lower investing activities [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time | Metric (in thousands) | March 31, 2025 | December 31, 2024 | Change (in thousands) | % Change | | :-------------------- | :------------- | :---------------- | :-------------------- | :------- | | Total assets | $2,678,060 | $2,795,530 | $(117,470) | (4.2%) | | Cash | $10,322 | $16,413 | $(6,091) | (37.1%) | | Receivables, net | $213,001 | $248,643 | $(35,642) | (14.3%) | | Rental equipment, net | $1,753,700 | $1,841,855 | $(88,155) | (4.8%) | | Total liabilities | $2,074,178 | $2,173,050 | $(98,872) | (4.5%) | | Senior secured credit facility | $114,473 | $199,304 | $(84,831) | (42.6%) | | Total stockholders' equity | $603,882 | $622,480 | $(18,598) | (3.0%) | [Condensed Consolidated Statements of Operations](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section details the company's financial performance over a period, showing revenues, expenses, and net income or loss | Metric (in thousands, except per share) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (in thousands) | % Change | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :-------------------- | :------- | | Total revenues | $319,455 | $371,357 | $(51,902) | (14.0%) | | Gross profit | $123,594 | $164,865 | $(41,271) | (25.0%) | | Income (loss) from operations | $5,845 | $52,020 | $(46,175) | (88.8%) | | Net income (loss) | $(6,208) | $25,889 | $(32,097) | (123.9%) | | Basic net income (loss) per common share | $(0.17) | $0.72 | $(0.89) | (123.6%) | | Diluted net income (loss) per common share | $(0.17) | $0.71 | $(0.88) | (123.9%) | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section reports the cash generated and used by the company across operating, investing, and financing activities | Metric (in thousands) | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (in thousands) | % Change | | :-------------------- | :-------------------------------- | :-------------------------------- | :-------------------- | :------- | | Net cash provided by operating activities | $97,799 | $83,350 | $14,449 | 17.3% | | Net cash used in investing activities | $(3,576) | $(142,289) | $138,713 | (97.5%) | | Net cash provided by (used in) financing activities | $(100,314) | $59,515 | $(159,829) | (268.5%) | | Net increase (decrease) in cash | $(6,091) | $576 | $(6,667) | (1157.5%) | | Cash, end of period | $10,322 | $9,076 | $1,246 | 13.7% | - The significant decrease in cash used in investing activities for Q1 2025 compared to Q1 2024 is primarily due to the absence of business acquisitions in the current period, whereas Q1 2024 included a **$121.6 million acquisition**[18](index=18&type=chunk)[152](index=152&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=11&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements - H&E Equipment Services, Inc. (H&E Rentals), founded in 1961, operates **160 branch locations** across **31 states**, specializing in aerial work platforms, earthmoving, and material handling equipment[25](index=25&type=chunk) - On February 19, 2025, the company entered into a merger agreement with Herc Holdings Inc. to be acquired for **$78.75 in cash** and **0.1287 shares of Herc common stock per share**, with the transaction expected to close mid-year 2025. This followed the termination of a prior merger agreement with United Rentals, Inc., for which Herc paid a **$63.5 million termination fee** on H&E's behalf[26](index=26&type=chunk)[27](index=27&type=chunk)[28](index=28&type=chunk)[49](index=49&type=chunk)[51](index=51&type=chunk) - Transaction expenses related to the Herc Merger amounted to **$9.8 million** for the three months ended March 31, 2025[55](index=55&type=chunk) - The company adopted ASU No. 2023-07, Segment Reporting, on January 1, 2024, which improved disclosures about reportable segments, with no significant changes to other accounting policies in Q1 2025[29](index=29&type=chunk)[48](index=48&type=chunk) - As of March 31, 2025, the company had **$114.5 million outstanding** under its **$750.0 million Senior Secured Credit Facility**, with **$620.7 million available** for borrowing, and a weighted average interest rate of approximately **5.5%**[81](index=81&type=chunk) - The company's **$1.25 billion, 3.875% Senior Unsecured Notes** are due in 2028, with a balance of **$1,244,655 thousand** at March 31, 2025[83](index=83&type=chunk)[84](index=84&type=chunk) Segment Revenues (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (in thousands) | % Change | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------- | :------- | | Equipment rentals | $274,032 | $295,325 | $(21,293) | (7.2%) | | Sales of rental equipment | $23,919 | $48,115 | $(24,196) | (50.3%) | | Sales of new equipment | $7,425 | $10,412 | $(2,987) | (28.7%) | | Parts, service and other | $14,079 | $17,505 | $(3,426) | (19.6%) | | **Total revenues** | **$319,455** | **$371,357** | **$(51,902)** | **(14.0%)** | Segment Gross Profit (in thousands) | Segment | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | Change (in thousands) | % Change | | :---------------------- | :-------------------------------- | :-------------------------------- | :-------------------- | :------- | | Equipment rentals | $104,796 | $127,897 | $(23,101) | (18.1%) | | Sales of rental equipment | $14,116 | $30,286 | $(16,170) | (53.4%) | | Sales of new equipment | $1,402 | $1,773 | $(371) | (20.9%) | | Parts, service and other | $3,280 | $4,909 | $(1,629) | (33.2%) | | **Total gross profit** | **$123,594** | **$164,865** | **$(41,271)** | **(25.0%)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and operational results, noting significant declines in revenues and gross profit, a net loss, improved operating cash flow, and strong liquidity - H&E Equipment Services, operating as H&E Rentals, is one of the largest rental equipment companies in the U.S., with **160 branch locations** across **31 states**, focusing on equipment rentals, sales of rental equipment, new equipment, parts, and services[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk) - The company's primary focus is equipment rentals, which accounted for approximately **86% of total revenues** for the three months ended March 31, 2025[110](index=110&type=chunk) - Total revenues decreased by **14.0%** to **$319.5 million** for Q1 2025, from **$371.4 million** in Q1 2024, with equipment rental revenues declining **7.2%** due to decreased utilization and rental rates, partly attributed to increased workforce turnover related to the pending merger[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Sales of rental equipment revenues decreased significantly by **50.3%** to **$23.9 million**, reflecting the company's fleet management strategy[136](index=136&type=chunk) - Total gross profit decreased by **25.0%** to **$123.6 million**, with the gross profit margin falling to **38.7%** from **44.4%** in the prior year[139](index=139&type=chunk) - Selling, General and Administrative (SG&A) expenses decreased by **2.4%** to **$111.6 million**, but increased as a percentage of total revenues to **34.9%** from **30.8%**[146](index=146&type=chunk) - Transaction expenses related to the Herc Merger amounted to **$9.8 million** in Q1 2025[147](index=147&type=chunk) - The company reported a net loss of **$6.2 million** for Q1 2025, compared to a net income of **$25.9 million** in Q1 2024[15](index=15&type=chunk) - Net cash provided by operating activities increased by **17.3%** to **$97.8 million** in Q1 2025. Net cash used in investing activities decreased substantially to **$3.6 million** from **$142.3 million** in Q1 2024, primarily due to the absence of large business acquisitions[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk) - Gross rental fleet capital expenditures decreased significantly to **$31.1 million** in Q1 2025 from **$74.4 million** in Q1 2024, influenced by fleet management strategy and the upcoming Herc Merger[159](index=159&type=chunk) - The company maintains a strong liquidity position with **$620.7 million** in available borrowings under its Senior Secured Credit Facility at March 31, 2025, in addition to **$10.3 million cash** on hand[157](index=157&type=chunk)[160](index=160&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's earnings are primarily exposed to market risk from interest rate changes on its variable-rate Senior Secured Credit Facility, with no other significant changes identified - Earnings may be affected by changes in interest rates due to the variable interest expense on the Senior Secured Credit Facility[162](index=162&type=chunk) - There have been no other significant changes in the company's exposure to market risk during the three months ended March 31, 2025[163](index=163&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[165](index=165&type=chunk) - No material changes in internal control over financial reporting occurred during the three months ended March 31, 2025[167](index=167&type=chunk) [PART II. OTHER INFORMATION](index=47&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and equity security sales [Item 1. Legal Proceedings](index=47&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various claims and legal actions in the ordinary course of business, including those related to the pending Herc Merger Agreement - The company is involved in various claims and legal actions in the ordinary course of business, including those related to the upcoming Herc Merger Agreement[168](index=168&type=chunk) [Item 1A. Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors were reported compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the company's risk factors were reported as of the date of this Quarterly Report on Form 10-Q, compared to those disclosed in the Annual Report on Form 10-K for the year ended December 31, 2024[170](index=170&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased **54,203 shares** of common stock at an average price of **$98.14 per share** in February 2025, primarily for withholding taxes related to restricted stock unit vesting Issuer Purchases of Equity Securities (Three Months Ended March 31, 2025) | Period | Total Number of Shares Purchased | Average Price Per Share | | :----------------- | :----------------------------- | :---------------------- | | February 1-28, 2025 | 54,203 | $98.14 | - The shares were repurchased as payment for withholding taxes related to the vesting of restricted stock units[171](index=171&type=chunk) [Item 3. Defaults upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reported no defaults upon senior securities for the period - There were no defaults upon senior securities[172](index=172&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Mine Safety Disclosures are not applicable to the company[173](index=173&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - No other information was reported[174](index=174&type=chunk) [Item 6. Exhibits](index=48&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report, including certifications and XBRL documents - Exhibits include certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002, and Inline XBRL documents[176](index=176&type=chunk) [Signatures](index=49&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q

Financial Performance - Total revenues for the first quarter of 2025 were $319.5 million, a decline of 14.0% compared to $371.4 million in the first quarter of 2024[7] - Net loss for the first quarter of 2025 was $6.2 million, or $0.17 per diluted share, compared to net income of $25.9 million, or $0.71 per diluted share, in the first quarter of 2024[15] - Adjusted EBITDA totaled $131.2 million, representing a decrease of 18.9% compared to $161.7 million in the first quarter of 2024, with adjusted EBITDA margins at 41.1%[16] - Gross profit for the first quarter was $123.6 million, down 25.0% from $164.9 million in the first quarter of 2024, with total gross margin declining to 38.7%[9] - Equipment rental revenues decreased by 7.2% to $274.0 million from $295.3 million in the same quarter of 2024[8] - Total revenues for Q1 2025 were $319.5 million, a decrease of 14% from $371.4 million in Q1 2024[30] - Equipment rentals revenue was $274.0 million, down 7% from $295.3 million year-over-year[30] - Gross profit decreased to $123.6 million, down 25% from $164.9 million in the same quarter last year[30] - Adjusted EBITDA for Q1 2025 was $131.2 million, down from $161.7 million in Q1 2024[35] - Rental revenues gross margin was 38.2%, down from 43.3% in Q1 2024[37] Expenses and Debt - Selling, General, and Administrative expenses were $111.6 million, a decrease of 2.4% compared to $114.3 million in the first quarter of 2024[11] - Total debt as of March 31, 2025, was $1.37 billion, a reduction from $1.45 billion a year earlier[32] - Cash balance decreased to $10.3 million from $16.4 million year-over-year[32] - The company incurred transaction expenses of $9.8 million in Q1 2025[30] Operational Metrics - Average rental rates, excluding acquisitions, declined by 2.0% compared to the first quarter of 2024[11] - Time utilization based on original equipment cost was 60.3% in the first quarter of 2025, down from 63.6% in the same quarter of 2024[9] - The original equipment cost of the rental fleet as of March 31, 2025, was approximately $2.9 billion, an increase of 3.8% compared to the previous year[10] Strategic Developments - The company plans to close the merger with Herc Rentals in mid-2025, which is expected to enhance operational resiliency[6] Market Risks - The company is facing risks related to supply chain disruptions and economic uncertainties impacting construction spending[26]

Financial Performance - Total revenues for the first quarter of 2025 were $319.5 million, a decline of 14.0% compared to $371.4 million in the first quarter of 2024 [6][13] - Total equipment rental revenues decreased to $274.0 million, down 7.2% from $295.3 million in the same quarter of 2024 [6][34] - The company reported a net loss of $6.2 million, or $0.17 per diluted share, compared to a net income of $25.9 million, or $0.71 per diluted share, in the first quarter of 2024 [13][26] Gross Profit and Margins - Gross profit for the first quarter of 2025 was $123.6 million, a decrease of 25.0% from $164.9 million in the first quarter of 2024 [7][14] - Total gross margin declined to 38.7% in the first quarter of 2025, down from 44.4% in the same quarter of 2024 [7][8] - Equipment rental gross margins were 38.2% compared to 43.3% in the first quarter of 2024 [7][34] Rental Fleet and Utilization - The original equipment cost of the rental fleet was approximately $2.9 billion, an increase of 3.8% compared to the end of the first quarter of 2024 [9][29] - Average time utilization based on original equipment cost was 60.3%, down from 63.6% in the first quarter of 2024 [7][8] - Dollar utilization was 33.1% compared to 37.0% in the first quarter of 2024 [9] Expenses and Adjusted Metrics - Selling, General, and Administrative (SG&A) expenses were $111.6 million, a decrease of 2.4% from $114.3 million in the first quarter of 2024 [10] - Adjusted EBITDA for the first quarter of 2025 totaled $131.2 million, a decrease of 18.9% compared to $161.7 million in the same quarter of 2024 [14][33] - Adjusted net income, excluding transaction expenses, was $1.2 million compared to net income of $25.9 million in the first quarter of 2024 [13][31] Strategic Developments - The company is pursuing a branch expansion strategy, with four openings in the first quarter and one in the second quarter of 2025 [3] - The planned merger with Herc Rentals is expected to enhance operational resiliency and is anticipated to close in mid-2025 [4][11]

[FORWARD-LOOKING STATEMENTS](index=4&type=section&id=FORWARD-LOOKING%20STATEMENTS) Forward-looking statements in this report are subject to various risks and uncertainties, including economic conditions and the pending Herc Holdings Inc merger - Forward-looking statements are **not guarantees of performance** and involve **risks and uncertainties** related to future events and circumstances[12](index=12&type=chunk)[13](index=13&type=chunk) - **Key risk factors** include general economic and geopolitical conditions, ability to forecast trends, global credit and commodity markets, oil and natural gas trends, supply chain disruptions, increased maintenance costs, global pandemics, indebtedness, business expansion risks, competitive pressures, cybersecurity attacks, adverse weather, climate change regulations, and risks associated with the pending transaction with Herc Holdings Inc[14](index=14&type=chunk)[15](index=15&type=chunk)[16](index=16&type=chunk)[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk)[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk) PART I [Item 1. Business](index=6&type=section&id=Item%201.%20Business) H&E Equipment Services, Inc. is an equipment rental company with 156 branches, focusing on a pure-play model, and has a pending merger with Herc Holdings Inc - H&E Equipment Services, Inc. was founded in 1961 and operates **156 branch facilities** in **31 states**, focusing on equipment rentals, sales, parts, and services[17](index=17&type=chunk)[18](index=18&type=chunk)[19](index=19&type=chunk) - The company terminated a merger agreement with United Rentals in February 2025 and subsequently entered into an Agreement and Plan of Merger with Herc Holdings Inc. for a cash and stock acquisition valued at approximately **$104.89 per share**. The transaction is expected to close **mid-2025**[20](index=20&type=chunk)[21](index=21&type=chunk)[22](index=22&type=chunk)[23](index=23&type=chunk) Rental Fleet Overview (as of December 31, 2024) | Metric | Value | | :----- | :---- | | Pieces of Equipment | 63,630 | | Original Acquisition Cost | ~$2.9 billion | | Average Age | 41.7 months | - The company's competitive strengths include an integrated platform, high-quality and multipurpose fleet, diverse customer markets, complementary parts and services, well-developed infrastructure (**156 branches**, **621 service technicians**, **381 sales people**), strong supplier relationships, customized IT systems (including CONNECT digital platform), strong customer relationships (**42,400 customers**), and an experienced management team[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - As of December 31, 2024, the company had approximately **2,800 employees**, with **29% people of color** and **13% female**, and a lost time incident rate of **0.15** and total reportable incident rate of **0.95**[52](index=52&type=chunk)[54](index=54&type=chunk)[57](index=57&type=chunk) - The company is committed to environmental stewardship, social responsibility, and transparent governance, with **34%** of its rental units being battery and electricity powered as of December 31, 2024[60](index=60&type=chunk)[61](index=61&type=chunk) [Item 1A. Risk Factors](index=18&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks that could adversely affect the company's business, operations, and financial results, including economic downturns, inflation, and the Herc merger - Operational and competitive risks include declines in construction/industrial activities, economic downturns, heightened inflation, financial/credit market disruptions, changes in U.S. laws/policies (e.g., tariffs), inability to forecast trends, revenue/operating result fluctuations, global pandemics, intense competition (including from AI/machine learning), reliance on limited manufacturers, supply chain disruptions, increasing equipment costs, residual value risk, increased maintenance costs, labor disputes, and fuel cost fluctuations[68](index=68&type=chunk)[74](index=74&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk)[84](index=84&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[90](index=90&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[102](index=102&type=chunk)[103](index=103&type=chunk)[104](index=104&type=chunk)[105](index=105&type=chunk) - Strategic risks involve challenges in identifying and completing attractive acquisitions or opening new start-up locations, and potential integration/consolidation risks[106](index=106&type=chunk)[107](index=107&type=chunk)[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[115](index=115&type=chunk)[116](index=116&type=chunk) - Liquidity and capital resource risks include unfavorable capital/credit market conditions, **substantial indebtedness ($1.5 billion as of Dec 31, 2024)**, inability to generate sufficient cash flow to service debt, potential for incurring more debt, restrictive covenants in debt agreements, variable interest rate exposure, and challenges in obtaining additional capital or refinancing debt[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk)[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk)[127](index=127&type=chunk)[128](index=128&type=chunk)[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk)[133](index=133&type=chunk)[134](index=134&type=chunk) - Governmental regulation risks stem from operating in **31 states**, exposing the company to diverse federal, state, and local regulations, including environmental and safety laws, climate change regulations, and potential changes to fiscal and tax policies. The recent reversal of the Chevron doctrine adds regulatory uncertainty[136](index=136&type=chunk)[137](index=137&type=chunk)[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk)[147](index=147&type=chunk) - Risks related to the pending transaction with Herc Holdings Inc. include the uncertainty of closing conditions being met, substantial transaction costs, potential termination fees (**$145 million to Herc**, plus refunding **$63.5 million to Herc** for the United termination fee), fixed exchange ratio for stock consideration, provisions discouraging competing acquirers, HSR Act review, stockholder litigation, and potential conflicts of interest for executive officers and directors[148](index=148&type=chunk)[149](index=149&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=

[Executive Summary & Strategic Update](index=1&type=section&id=Executive%20Summary%20%26%20Strategic%20Update) This section covers the strategic announcement of H&E's acquisition by Herc Holdings and highlights key financial results for Q4 and full year 2024 [Strategic Announcement](index=1&type=section&id=Strategic%20Announcement) H&E Equipment Services, Inc. announced its agreement to be acquired by Herc Holdings Inc., bringing together two companies with extensive industry experience - H&E Equipment Services, Inc. (NASDAQ: HEES) announced its agreement to be acquired by Herc Holdings Inc. (NYSE: HRI)[3](index=3&type=chunk) - The acquisition will combine two companies with a combined **120 years of industry experience**[3](index=3&type=chunk) [Fourth Quarter and Full Year 2024 Highlights](index=1&type=section&id=Fourth%20Quarter%20and%20Full%20Year%202024%20Highlights) H&E Rentals reported a slight revenue decrease and a significant drop in net income and Adjusted EBITDA for Q4 2024, while full-year revenues increased with modest declines in net income and Adjusted EBITDA Fourth Quarter 2024 Key Financial Highlights | Metric | Q4 2024 | Q4 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Revenues | $384.1M | $385.8M | -0.4% | | Net income | $32.8M | $53.5M | -38.7% | | Adjusted EBITDA | $174.9M | $185.2M | -5.6% | | Adjusted EBITDA margin | 45.5% | 48.0% | -2.5 pp | Full Year 2024 Key Financial Highlights | Metric | FY 2024 | FY 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Revenues | $1,516.6M | $1,469.2M | +3.2% | | Net income | $123.0M | $169.3M | -27.4% | | Adjusted EBITDA | $685.2M | $688.2M | -0.4% | | Adjusted EBITDA margin | 45.2% | 46.8% | -1.6 pp | [Financial Discussion - Fourth Quarter 2024](index=1&type=section&id=Financial%20Discussion%20-%20Fourth%20Quarter%202024) This section details H&E's financial performance for Q4 2024, covering revenue, gross profit, rental fleet metrics, operating expenses, and net income [Revenue Performance](index=1&type=section&id=Revenue%20Performance_Q4) Total revenues for Q4 2024 slightly decreased by 0.4% to $384.1 million, driven by a decline in rental equipment sales offset by new equipment sales growth Q4 2024 Revenue Breakdown | Revenue Type | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Total Revenues | $384.1 | $385.8 | -0.4% | | Total equipment rental revenues | $319.4 | $316.9 | +0.8% | | Rental revenues | $283.0 | $280.6 | +0.9% | | Sales of rental equipment | $28.4 | $40.6 | -30.1% | | Sales of new equipment | $20.5 | $9.8 | +109.0% | [Gross Profit and Margins](index=1&type=section&id=Gross%20Profit%20and%20Margins_Q4) Gross profit decreased by 10.1% to $167.6 million in Q4 2024, with overall gross margin declining due to lower rental and equipment sales margins Q4 2024 Gross Profit and Margins | Metric | Q4 2024 | Q4 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Gross Profit | $167.6M | $186.3M | -10.1% | | Total Gross Margin | 43.6% | 48.3% | -4.7 pp | | Total equipment rental gross margins | 44.9% | 48.2% | -3.3 pp | | Rental gross margins | 50.9% | 54.2% | -3.3 pp | | Sales of rental equipment gross margins | 58.9% | 66.0% | -7.1 pp | | Sales of new equipment gross margins | 17.8% | 15.3% | +2.5 pp | [Rental Fleet Metrics](index=2&type=section&id=Rental%20Fleet%20Metrics_Q4) The rental fleet's original equipment cost increased by 5.5% to $2.9 billion, but dollar and time utilization, along with average rental rates, decreased - Original equipment cost of rental fleet: **~$2.9 billion** (up **5.5%** compared to Q4 2023)[8](index=8&type=chunk)[10](index=10&type=chunk) Q4 2024 Rental Fleet Utilization and Rates | Metric | Q4 2024 | Q4 2023 | Change | | :----------------------- | :------ | :------ | :----- | | Dollar utilization | 38.2% | 40.3% | -2.1 pp | | Time utilization | 66.4% | 68.4% | -2.0 pp | | Average rental rates | -1.1% | N/A | -1.1% YoY | - Average rental fleet age on December 31, 2024, was **41.7 months**, compared to an industry average of **48.6 months**[10](index=10&type=chunk) [Selling, General and Administrative Expenses](index=2&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses_Q4) SG&A expenses increased by 9.7% to $117.0 million in Q4 2024, primarily due to higher professional fees and facilities costs Q4 2024 SG&A Expenses | Metric | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | SG&A expenses | $117.0 | $106.6 | +9.7% | | SG&A as % of total revenues | 30.5% | 27.6% | +2.9 pp | - Increase primarily due to higher professional fees (including **$4.4 million in transaction-related costs**), increased facilities costs, and higher depreciation and amortization expenses[9](index=9&type=chunk) - Approximately **$10.5 million** of SG&A expenses were attributable to the Company's expansion activities[9](index=9&type=chunk) [Income from Operations](index=2&type=section&id=Income%20from%20Operations_Q4) Income from operations for Q4 2024 decreased to $53.8 million (14.0% of revenues) from $81.2 million (21.1% of revenues) in Q4 2023 Q4 2024 Income from Operations | Metric | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Income from operations | $53.8 | $81.2 | -33.7% | | Income from operations as % of revenues | 14.0% | 21.1% | -7.1 pp | - Income from operations included pre-tax transaction expenses of **$4.4 million**[10](index=10&type=chunk) - Adjusted income from operations (excluding transaction expenses) was **$58.2 million**, or **15.2% of revenues**[11](index=11&type=chunk) [Interest Expense](index=3&type=section&id=Interest%20Expense_Q4) Interest expense for Q4 2024 increased to $17.6 million compared to $16.3 million in the prior year quarter Q4 2024 Interest Expense | Metric | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Interest expense | $17.6 | $16.3 | +7.9% | [Net Income and EPS](index=1&type=section&id=Net%20Income%20and%20EPS_Q4) Net income for Q4 2024 was $32.8 million, or $0.90 per diluted share, a significant decrease from Q4 2023 Q4 2024 Net Income and EPS | Metric | Q4 2024 | Q4 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Net income | $32.8M | $53.5M | -38.7% | | Diluted EPS | $0.90 | $1.47 | -38.7% | - Adjusted net income (excluding transaction expenses) was **$36.1 million**, or **$0.99 per diluted share**[13](index=13&type=chunk) - The effective income tax rate for Q4 2024 was **13.6%** (**14.8% adjusted** for transaction expenses) compared to **19.4%** in Q4 2023[5](index=5&type=chunk)[13](index=13&type=chunk) [Adjusted EBITDA](index=1&type=section&id=Adjusted%20EBITDA_Q4) Adjusted EBITDA decreased by 5.6% to $174.9 million in Q4 2024, with the margin declining to 45.5% Q4 2024 Adjusted EBITDA | Metric | Q4 2024 (Millions) | Q4 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Adjusted EBITDA | $174.9 | $185.2 | -5.6% | | Adjusted EBITDA margin | 45.5% | 48.0% | -2.5 pp | [Financial Discussion - Full Year 2024](index=3&type=section&id=Financial%20Discussion%20-%20Full%20Year%202024) This section analyzes H&E's full-year 2024 financial performance, including revenue, gross profit, operating expenses, and net income [Revenue Performance](index=3&type=section&id=Revenue%20Performance_FY) Total revenues for full year 2024 increased by 3.2% to $1,516.6 million, driven by equipment rental and new equipment sales growth FY 2024 Revenue Breakdown | Revenue Type | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Total Revenues | $1,516.6 | $1,469.2 | +3.2% | | Total equipment rental revenues | $1,253.3 | $1,186.2 | +5.7% | | Rental revenues | $1,108.3 | $1,051.6 | +5.4% | | Sales of rental equipment | $139.2 | $165.1 | -15.7% | | Sales of new equipment | $55.6 | $39.1 | +42.2% | [Gross Profit and Margins](index=3&type=section&id=Gross%20Profit%20and%20Margins_FY) Gross profit for 2024 slightly decreased by 1.4% to $675.2 million, with overall gross margin declining to 44.5% FY 2024 Gross Profit and Margins | Metric | FY 2024 | FY 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Gross Profit | $675.2M | $684.5M | -1.4% | | Total Gross Margin | 44.5% | 46.6% | -2.1 pp | | Total equipment rental gross margins | 44.8% | 46.7% | -1.9 pp | | Rental gross margins | 50.4% | 52.1% | -1.7 pp | | Sales of rental equipment gross margins | 61.4% | 60.5% | +0.9 pp | | Sales of new equipment gross margins | 18.0% | 14.1% | +3.9 pp | - Average 2024 rental rates increased **0.8%** compared to 2023[16](index=16&type=chunk) - Time utilization (based on original equipment cost) was **66.0%** in 2024 compared to **68.8%** in 2023[16](index=16&type=chunk) [Selling, General and Administrative Expenses](index=3&type=section&id=Selling%2C%20General%20and%20Administrative%20Expenses_FY) SG&A expenses increased by 12.4% to $455.6 million in 2024, primarily due to higher employee-related costs and expansion activities FY 2024 SG&A Expenses | Metric | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | SG&A expenses | $455.6 | $405.4 | +12.4% | | SG&A as % of total revenues | 30.0% | 27.6% | +2.4 pp | - Increase primarily due to higher employee salaries, wages, payroll taxes, and other related employee costs, as well as higher expenses attributable to depreciation and amortization, facilities and professional fees[17](index=17&type=chunk) - Approximately **$44.5 million** of the increase in SG&A expenses in 2024 were associated with branches opened or acquired during or after the fourth quarter of 2023[17](index=17&type=chunk) [Income from Operations](index=3&type=section&id=Income%20from%20Operations_FY) Income from operations for 2024 decreased to $229.3 million (15.1% of revenues) from $276.7 million (18.8% of revenues) in 2023 FY 2024 Income from Operations | Metric | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Income from operations | $229.3 | $276.7 | -17.1% | | Income from operations as % of revenues | 15.1% | 18.8% | -3.7 pp | - Income from operations in 2024 included pre-tax transaction expenses of **$4.4 million**[18](index=18&type=chunk)[19](index=19&type=chunk) - Adjusted income from operations (excluding transaction expenses) was **$233.7 million**, or **15.4% of revenues**[19](index=19&type=chunk) [Interest Expense](index=4&type=section&id=Interest%20Expense_FY) Interest expense for the full year 2024 increased to $73.0 million compared to $60.9 million in the previous year FY 2024 Interest Expense | Metric | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Interest expense | $73.0 | $60.9 | +19.9% | [Net Income and EPS](index=4&type=section&id=Net%20Income%20and%20EPS_FY) Net income for 2024 totaled $123.0 million, or $3.37 per diluted share, a decrease from $169.3 million in 2023 FY 2024 Net Income and EPS | Metric | FY 2024 | FY 2023 | Change (%) | | :----------------------- | :------ | :------ | :--------- | | Net income | $123.0M | $169.3M | -27.4% | | Diluted EPS | $3.37 | $4.66 | -27.7% | - Adjusted net income (excluding transaction expenses) was **$126.3 million**, or **$3.46 per diluted share**[21](index=21&type=chunk) - The effective income tax rate in 2024 was **24.3%** compared to **24.2%** in 2023[21](index=21&type=chunk) [Adjusted EBITDA](index=4&type=section&id=Adjusted%20EBITDA_FY) Adjusted EBITDA for 2024 slightly decreased by 0.4% to $685.2 million, with the Adjusted EBITDA margin declining to 45.2% FY 2024 Adjusted EBITDA | Metric | FY 2024 (Millions) | FY 2023 (Millions) | Change (%) | | :----------------------- | :----------------- | :----------------- | :--------- | | Adjusted EBITDA | $685.2 | $688.2 | -0.4% | | Adjusted EBITDA margin | 45.2% | 46.8% | -1.6 pp | [Non-GAAP Financial Measures](index=4&type=section&id=Non-GAAP%20Financial%20Measures) This section defines and explains the rationale behind the company's use of non-GAAP financial measures like EBITDA and Adjusted Income Measures [Definitions and Rationale](index=4&type=section&id=Definitions%20and%20Rationale) The report utilizes non-GAAP measures such as EBITDA and Adjusted Income Measures to evaluate performance, cautioning against their use in isolation from GAAP results - Non-GAAP measures include EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Income from Operations, Adjusted Net Income, and Adjusted Net Income per share[23](index=23&type=chunk)[26](index=26&type=chunk) - Adjusted EBITDA is defined as EBITDA adjusted for non-cash stock-based compensation expense, impairment of goodwill, and transaction expenses[23](index=23&type=chunk) - Adjusted Income Measures are defined as Income from Operations, Net Income, and Net Income per Share, adjusted for the impairment of goodwill and transaction expenses[26](index=26&type=chunk) - These measures are used to evaluate business performance, develop budgets, and provide supplemental information to investors, but should not be considered in isolation or as substitutes for GAAP results[24](index=24&type=chunk)[25](index=25&type=chunk)[26](index=26&type=chunk) [Company Information](index=5&type=section&id=Company%20Information) This section provides background on H&E Rentals and outlines the nature of forward-looking statements within the report [About H&E Rentals](index=5&type=section&id=About%20H%26E%20Rentals) Founded in 1961, H&E is one of the largest rental equipment companies in the U.S., offering a diverse fleet across high-growth geographies - Founded in 1961, H&E is one of the largest rental equipment companies in the nation[30](index=30&type=chunk) - The Company's fleet is comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines[30](index=30&type=chunk) - H&E serves diverse end markets in many high-growth geographies with branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions[30](index=30&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) The press release contains forward-looking statements subject to various risks and uncertainties, including those related to the pending acquisition - Statements in the press release that are not historical facts are 'forward-looking statements' subject to known and unknown risks and uncertainties[31](index=31&type=chunk) - Risk factors include general economic and geopolitical conditions, construction and industrial activity, ability to forecast trends, global credit and commodity markets, supply chain disruptions, increased maintenance costs, cybersecurity attacks, adverse weather, climate change regulation, and risks related to the pending transaction with Herc Holdings Inc[31](index=31&type=chunk)[32](index=32&type=chunk) - Investors are urged to consider these factors carefully and are cautioned not to place undue reliance on such forward-looking statements, as the company is under no obligation to publicly update or revise them[31](index=31&type=chunk)[32](index=32&type=chunk) [Unaudited Financial Statements & Reconciliations](index=7&type=section&id=Unaudited%20Financial%20Statements%20%26%20Reconciliations) This section presents unaudited financial statements and reconciliations of non-GAAP measures for the reported periods [Consolidated Statements of Income](index=7&type=section&id=Consolidated%20Statements%20of%20Income) This section presents the unaudited consolidated statements of income for Q4 and full year 2024 and 2023, detailing revenues, costs, and net income Consolidated Statements of Income (Unaudited, Amounts in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :------------------------------------ | :------ | :------ | :------ | :------ | | **Revenues:** | | | | | | Equipment rentals | $319,425 | $316,874 | $1,253,325 | $1,186,152 | | Sales of rental equipment | 28,359 | 40,598 | 139,201 | 165,074 | | Sales of new equipment | 20,461 | 9,791 | 55,597 | 39,099 | | Parts, service and other | 15,837 | 18,543 | 68,460 | 78,891 | | **Total revenues** | **384,082** | **385,806** | **1,516,583** | **1,469,216** | | **Gross profit** | **167,601** | **186,339** | **675,200** | **684,461** | | Selling, general and administrative expenses | 116,996 | 106,620 | 455,554 | 405,432 | | Income from operations | 53,821 | 81,242 | 229,311 | 276,704 | | Interest expense | (17,590) | (16,349) | (72,954) | (60,891) | | **Net income** | **$32,764** | **$53,524** | **$122,982** | **$169,293** | | Diluted EPS | $0.90 | $1.47 | $3.37 | $4.66 | [Selected Balance Sheet Data](index=8&type=section&id=Selected%20Balance%20Sheet%20Data) This section provides key unaudited balance sheet data as of December 31, 2024, and 2023, including assets, liabilities, and equity Selected Balance Sheet Data (Unaudited, Amounts in thousands) | Metric | Dec 31, 2024 | Dec 31, 2023 | | :------------------------------------ | :----------- | :----------- | | Cash | $16,413 | $8,500 | | Rental equipment, net | 1,841,855 | 1,756,578 | | Total assets | 2,795,530 | 2,639,886 | | Total debt | 1,453,311 | 1,434,661 | | Total liabilities | 2,173,050 | 2,105,597 | | Stockholders' equity | 622,480 | 534,289 | | Total liabilities and stockholders' equity | $2,795,530 | $2,639,886 | [Non-GAAP Reconciliations](index=8&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP financial measures, including adjusted income and EBITDA [Adjusted Income Measures Reconciliation (Q4 2024)](index=8&type=section&id=Adjusted%20Income%20Measures%20Reconciliation%20%28Q4%202024%29) This table reconciles GAAP income from operations, net income, and diluted EPS to their adjusted non-GAAP counterparts for Q4 2024, primarily by adding back transaction expenses and adjusting for their tax impact Q4 2024 Adjusted Income Measures Reconciliation (Unaudited, Amounts in thousands) | Metric | As Reported | Adjustment | As Adjusted | | :------------------------------------ | :---------- | :--------- | :---------- | | Income from continuing operations | $53,821 | $4,394 | $58,215 | | Net income from continuing operations | $32,764 | $3,313 | $36,077 | | Diluted - Net income per common share | $0.90 | $0.09 | $0.99 | - The adjustment relates to transaction expenses incurred[38](index=38&type=chunk) [Adjusted Income Measures Reconciliation (Full Year 2024 & 2023)](index=9&type=section&id=Adjusted%20Income%20Measures%20Reconciliation%20%28Full%20Year%202024%20%26%202023%29) This section provides reconciliations for full-year 2024 and 2023, adjusting GAAP income from operations, net income, and diluted EPS for transaction expenses in 2024 and goodwill impairment in 2023, along with their respective tax impacts FY 2024 Adjusted Income Measures Reconciliation (Unaudited, Amounts in thousands) | Metric | As Reported | Adjustment | As Adjusted | | :------------------------------------ | :---------- | :--------- | :---------- | | Income from continuing operations | $229,311 | $4,394 | $233,705 | | Net income from continuing operations | $122,982 | $3,313 | $126,295 | | Diluted - Net income per common share | $3.37 | $0.09 | $3.46 | FY 2023 Adjusted Income Measures Reconciliation (Unaudited, Amounts in thousands) | Metric | As Reported | Adjustment | As Adjusted | | :------------------------------------ | :---------- | :--------- | :---------- | | Income from continuing operations | $276,704 | $5,714 | $282,418 | | Net income from continuing operations | $169,293 | $4,407 | $173,700 | | Diluted - Net income per common share | $4.66 | $0.12 | $4.78 | - Adjustments relate to transaction expenses incurred in 2024 and impairment of goodwill in 2023[39](index=39&type=chunk) [EBITDA and Adjusted EBITDA Reconciliation](index=10&type=section&id=EBITDA%20and%20Adjusted%20EBITDA%20Reconciliation) This table reconciles net income to EBITDA and then to Adjusted EBITDA for both the three and twelve months ended December 31, 2024, and 2023, by adding back interest expense, income taxes, depreciation, amortization, non-cash stock-based compensation, goodwill impairment, and transaction expenses EBITDA and Adjusted EBITDA Reconciliation (Unaudited, Amounts in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :------------------------------------ | :------ | :------ | :------ | :------ | | Net Income | $32,764 | $53,524 | $122,982 | $169,293 | | Interest Expense | 17,590 | 16,349 | 72,954 | 60,891 | | Provision for income taxes | 5,174 | 12,902 | 39,564 | 53,904 | | Depreciation | 109,701 | 98,330 | 423,757 | 381,959 | | Amortization of intangibles | 2,597 | 1,407 | 10,265 | 6,455 | | **EBITDA** | **$167,826** | **$182,512** | **$669,522** | **$672,502** | | Impairment of goodwill | — | — | — | 5,714 | | Non-cash stock-based compensation expense | 2,630 | 2,722 | 11,236 | 10,026 | | Transaction expense | 4,394 | — | 4,394 | — | | **Adjusted EBITDA** | **$174,850** | **$185,234** | **$685,152** | **$688,242** | [Rental Revenues and Cost of Sales Disaggregation](index=11&type=section&id=Rental%20Revenues%20and%20Cost%20of%20Sales%20Disaggregation) This supplemental schedule disaggregates equipment rental revenues and their corresponding costs for the three and twelve months ended December 31, 2024, and 2023, providing detailed gross profit and gross margin figures for equipment rentals and 'rental other' categories Rental Revenues and Cost of Sales Disaggregation (Unaudited, Amounts in thousands) | Metric | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :------------------------------------ | :------ | :------ | :------ | :------ | | **RENTAL REVENUES:** | | | | | | Equipment rentals | $282,965 | $280,576 | $1,108,273 | $1,051,632 | | Rental other | 36,460 | 36,298 | 145,052 | 134,520 | | **Total equipment rentals** | **319,425** | **316,874** | **1,253,325** | **1,186,152** | | **TOTAL RENTAL COST OF SALES** | **175,846** | **164,017** | **691,758** | **632,713** | | **TOTAL RENTAL REVENUES GROSS PROFIT** | **$143,579** | **$152,857** | **$561,567** | **$553,439** | | **RENTAL REVENUES GROSS MARGIN:** | | | | | | Equipment rentals | 50.9% | 54.2% | 50.4% | 52.1% | | Rentals other | -1.3% | 2.2% | 1.8% | 4.2% | | Total rental revenues gross margin | 44.9% | 48.2% | 44.8% | 46.7% |

Core Viewpoint - H&E Equipment Services, Inc. reported its fourth quarter and full year results for 2024, highlighting a decrease in total revenues but an increase in equipment rental revenues, alongside a significant acquisition agreement with Herc Holdings Inc. [1] Financial Summary for Fourth Quarter 2024 - Total revenues decreased by 0.4% to $384.1 million compared to $385.8 million in Q4 2023 [3][6] - Total equipment rental revenues increased by 0.8% to $319.4 million compared to $316.9 million in the same quarter last year [3][6] - Rental revenues rose by 0.9% to $283.0 million compared to $280.6 million in Q4 2023 [3][6] - Sales of rental equipment decreased by 30.1% to $28.4 million compared to $40.6 million in Q4 2023 [3][6] - Sales of new equipment increased by 109.0% to $20.5 million compared to $9.8 million in the same quarter last year [3][6] Gross Profit Analysis - Gross profit decreased by 10.1% to $167.6 million compared to $186.3 million in Q4 2023 [4][6] - Gross margin for Q4 2024 was 43.6%, down from 48.3% in the same period last year [4][6] - Gross margin on total equipment rentals was 44.9% compared to 48.2% in Q4 2023 [4][6] - Average rental rates declined by 1.1% compared to Q4 2023 [4][6] Rental Fleet and Utilization - The original equipment cost of the rental fleet was approximately $2.9 billion, an increase of 5.5% compared to Q4 2023 [5][6] - Dollar utilization for Q4 2024 was 38.2%, down from 40.3% in Q4 2023 [5][6] SG&A Expenses - SG&A expenses for Q4 2024 were $117.0 million, an increase of 9.7% compared to $106.6 million in Q4 2023 [7][6] - SG&A expenses as a percentage of total revenues increased to 30.5% from 27.6% in Q4 2023 [7][6] Income from Operations - Income from operations for Q4 2024 was $53.8 million, or 14.0% of revenues, compared to $81.2 million, or 21.1% of revenues in Q4 2023 [8][6] - Adjusted income from operations, excluding transaction expenses, was $58.2 million, or 15.2% of revenues [8][6] Interest Expense and Net Income - Interest expense for Q4 2024 was $17.6 million, compared to $16.3 million in Q4 2023 [9][6] - Net income for Q4 2024 was $32.8 million, or $0.90 per diluted share, down from $53.5 million, or $1.47 per diluted share in Q4 2023 [10][6] Full Year Financial Overview - Total revenues for 2024 were $1,516.6 million, an increase of 3.2% compared to $1,469.2 million in 2023 [12][6] - Total equipment rental revenues increased by 5.7% to $1,253.3 million compared to $1,186.2 million in 2023 [12][6] - Net income for 2024 totaled $123.0 million, or $3.37 per diluted share, compared to $169.3 million, or $4.66 per diluted share in 2023 [17][6] Adjusted EBITDA - Adjusted EBITDA for Q4 2024 decreased by 5.6% to $174.9 million compared to $185.2 million in Q4 2023 [11][6] - Adjusted EBITDA margin for Q4 2024 was 45.5% compared to 48.0% in the same quarter last year [11][6]

Core Viewpoint - Rowley Law PLLC is investigating potential securities law violations related to the proposed acquisition of H&E Equipment Services, Inc. by Herc Holdings Inc. [1] Group 1: Acquisition Details - H&E Equipment Services, Inc. stockholders will receive $78.75 and 0.1287 shares of Herc Holdings common stock for each share of H&E Equipment stock they hold [1] - The acquisition transaction is expected to close in mid-2025 [1] Group 2: Legal Investigation - Rowley Law PLLC is representing shareholders in the investigation concerning the acquisition [1] - Additional information regarding the investigation can be obtained through Rowley Law PLLC's website or by contacting their office [2]

Group 1: Mergers and Acquisitions - H&E Equipment Services, Inc. has entered into a definitive agreement with United Rentals, Inc. for $92.00 per share [1] - ACELYRIN, INC. has agreed to be acquired by Alumis Inc. for 0.4274 shares of Alumis common stock for each share of ACELYRIN common stock, resulting in Alumis stockholders owning approximately 55% and Acelyrin stockholders 45% of the combined company on a fully diluted basis [2] - Portman Ridge Finance Corporation will be acquired by Logan Ridge Finance Corporation, with Portman Ridge remaining the surviving public entity and continuing to trade on Nasdaq under the symbol "PTMN" [3] - The Interpublic Group of Companies, Inc. has entered into a definitive agreement with Omnicom for 0.344 Omnicom shares for each share of Interpublic common stock, leading to Omnicom shareholders owning 60.6% and Interpublic 39.4% of the combined company on a fully diluted basis [3] Group 2: Shareholder Rights and Legal Actions - Kuehn Law, PLLC is investigating potential claims related to the proposed mergers, focusing on whether the Boards acted to maximize shareholder value, failed to disclose material information, and conducted a fair process [1] - Shareholders are encouraged to get involved to contribute to the integrity and fairness of the financial markets, with Kuehn Law covering all case costs and not charging its investor clients [4]