H&E Equipment (HEES) came out with quarterly earnings of $0.85 per share, missing the Zacks Consensus Estimate of $0.97 per share. This compares to earnings of $1.46 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -12.37%. A quarter ago, it was expected that this construction and industrial equipment service provider would post earnings of $1 per share when it actually produced earnings of $0.91, delivering a surprise of -9%. ...

BATON ROUGE, La., Oct. 29, 2024 (GLOBE NEWSWIRE) -- H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”, the “Company”, d/b/a "H&E Rentals") today reported financial results for the third quarter ended September 30, 2024. The report includes the Company's branch expansion achievements, with the addition of eight new locations in the third quarter, expanding the Company's branch network to 157 locations across 32 states. THIRD QUARTER 2024 SUMMARY WITH A COMPARISON TO THIRD QUARTER 2023 Revenues declined 4.0% ...

BATON ROUGE, La., Oct. 22, 2024 (GLOBE NEWSWIRE) -- In the release issued under the same headline on Tuesday, October 22nd, by H&E Equipment Services, Inc. (NASDAQ: HEES) ("H&E", the "Company", d/b/a "H&E Rentals"), please note in the first sentence of the second paragraph, the date for the live broadcast should be October 29th, not July 30th. The corrected release follows: H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”, the “Company”, d/b/a “H&E Rentals”) today announced that it will release its 2024 t ...

Core Viewpoint - H&E Equipment Services, Inc. is set to release its third quarter financial results for 2024 on October 29, 2024, and will hold a conference call to discuss these results [1] Group 1: Financial Results Announcement - The company will announce its 2024 third quarter financial results before the market opens on October 29, 2024 [1] - A conference call to discuss the results will take place on the same day at 10:00 a.m. (Eastern Time) [1] - Participants can join the call by dialing 844-887-9400 approximately 10 minutes prior to the start [1] Group 2: Conference Call Details - A telephonic replay of the conference call will be available after 1:00 p.m. (Eastern Time) on October 29, 2024, until November 12, 2024 [1] - The replay can be accessed by dialing 877-344-7529 and entering the confirmation code 3897091 [1] Group 3: Company Overview - H&E Equipment Services, founded in 1961, is one of the largest rental equipment companies in the United States [3] - The company boasts a young and versatile fleet, including aerial work platforms, earthmoving, material handling, and other specialty lines [3] - H&E serves diverse end markets across high-growth geographies with branches in various regions including the Pacific Northwest, West Coast, and Southeast [3]

Financial Data and Key Metrics Changes - Total revenues increased by 4.5% year-over-year, totaling $376.3 million, driven by higher rental revenues and sales of new equipment [48][45] - Net income for the second quarter was $33.3 million, or $0.91 per diluted share, compared to $41.2 million, or $1.14 per diluted share in the same quarter of 2023 [24] - Gross profit totaled $171.3 million, up 1.7% from the previous year, with a gross margin of 45.5%, down 120 basis points year-over-year [23] - Adjusted EBITDA increased by 2.8% to $173.2 million, with an adjusted EBITDA margin of 46% compared to 46.8% in the prior year [51] Business Line Data and Key Metrics Changes - Rental revenues grew by 6.5% to $275.5 million, with rental margins at 51%, slightly down from 51.8% in the previous year [18][22] - Sales of rental equipment declined by 11.9% year-over-year to $34.9 million, reflecting a strategic alignment with fleet management [49] - The average fleet age was 40 months, compared to the industry average of 48.1 months, indicating a relatively young fleet [26] Market Data and Key Metrics Changes - Physical fleet utilization averaged 66.4%, down 290 basis points year-over-year but improved by 280 basis points sequentially from the first quarter of 2024 [10][22] - Rental rates improved by 1.9% year-over-year but declined by 0.1% sequentially [10][22] - The company reported a liquidity position of $459 million, with excess availability under the ABL facility at approximately $1.7 billion [27] Company Strategy and Development Direction - The company is focused on expanding its branch network, having opened 15 new locations since the close of the second quarter of 2023, contributing to a 45% increase in branch count over the last three years [20][12] - The strategy includes targeting mega projects, which represent a stable demand base, and leveraging infrastructure spending for growth [11][12] - The company aims to maintain a disciplined approach to capital expenditures, with a revised range of $350 million to $400 million for 2024 [20][105] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the construction market, noting a transition to a more normalized growth environment compared to the previous years of exceptional growth [46] - The company anticipates continued pressure on EBITDA flow-through margins in the latter half of 2024 due to moderating rental rates and lower physical utilization [82] - Management remains confident in the growth prospects for 2025, contingent on interest rate movements [81] Other Important Information - SG&A expenses increased by 12.7% year-over-year to $111.8 million, primarily due to branch expansion and related costs [25] - The company paid a regular quarterly dividend of $0.275 per share in the second quarter of 2024, with intentions to continue this practice [27] Q&A Session Summary Question: What is the outlook for EBITDA flow-through for the remainder of the year? - Management indicated that while there is expected pressure on EBITDA flow-through margins, they remain optimistic about the ongoing participation in mega projects [36][82] Question: How does the company view the impact of inflation on fleet growth versus equipment revenue growth? - Management acknowledged an inflationary headwind but emphasized that it is minimal compared to overall utilization challenges [58] Question: What is the company's perspective on the softness in local accounts and potential rental rate declines? - Management does not anticipate declines in rental rates for small and medium-sized projects, attributing any rate changes to the increasing focus on mega projects [59] Question: How does the company plan to manage fleet movement to optimize market exposure? - Management confirmed that they are actively moving fleet from lower-demand areas to capitalize on opportunities in mega projects, a standard practice in fleet management [70] Question: What is the current status of the infrastructure spending cycle? - Management believes the industry is in the early stages of a multi-year infrastructure spending opportunity, with increasing project activity [102]

[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q) This report is a Quarterly Report on Form 10-Q for Q2 2024 filed by H&E Equipment Services, Inc. - The document is a Quarterly Report on Form 10-Q for the period ended **June 30, 2024**, filed by **H&E Equipment Services, Inc.**, a large accelerated filer[1](index=1&type=chunk)[10](index=10&type=chunk)[19](index=19&type=chunk)[22](index=22&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, cautioning investors about potential material differences in actual results. - The report contains forward-looking statements that involve risks and uncertainties, and actual results may differ materially from expectations. Investors are cautioned not to place undue reliance on these statements[12](index=12&type=chunk)[24](index=24&type=chunk)[32](index=32&type=chunk) - Key factors that could cause actual results to differ include general economic and geopolitical conditions, demand for products, global credit and commodity markets, supply chain disruptions, indebtedness, acquisitions, competitive pressures, cybersecurity risks, and climate change regulations[32](index=32&type=chunk) [PART I. FINANCIAL INFORMATION](index=7&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=7&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of income, and cash flows, along with detailed notes explaining accounting policies, acquisitions, financial instruments, equity, debt, leases, and segment information. [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This table presents the company's financial position, detailing total assets, liabilities, and stockholders' equity at specific dates. | Metric | June 30, 2024 (Unaudited) | December 31, 2023 | | :---------------------- | :------------------------ | :---------------- | | Total Assets | $2,850,817 | $2,639,886 | | Total Liabilities | $2,274,768 | $2,105,597 | | Total Stockholders' Equity | $576,049 | $534,289 | [Condensed Consolidated Statements of Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) This table summarizes the company's financial performance over specified periods, including revenues, gross profit, income from operations, and net income. | Metric (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenues | $376,282 | $360,232 | $747,639 | $682,714 | | Gross Profit | $171,280 | $168,361 | $336,145 | $309,739 | | Income from Operations | $62,801 | $69,538 | $114,821 | $116,248 | | Net Income | $33,261 | $41,216 | $59,150 | $66,890 | | Basic EPS | $0.92 | $1.14 | $1.63 | $1.86 | | Diluted EPS | $0.91 | $1.14 | $1.62 | $1.84 | [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section details the company's cash inflows and outflows from operating, investing, and financing activities over specified periods. | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash from operating activities | $216,360 | $134,910 | | Net cash used in investing activities | $(298,310) | $(268,915) | | Net cash from financing activities | $82,059 | $99,577 | | Net increase (decrease) in cash | $109 | $(34,428) | | Cash, end of period | $8,609 | $46,902 | | Non-Cash Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------- | :----------------------------- | :----------------------------- | | Rental fleet in accounts payable | $49,591 | $0 | | Assets transferred from inventory to rental fleet | $84,994 | $66,982 | | Operating lease assets obtained | $26,111 | $14,076 | [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements. [(1) Organization and Nature of Operations](index=13&type=section&id=(1)%20Organization%20and%20Nature%20of%20Operations) This note describes the company's business, operational structure, and geographic presence. - **H&E Equipment Services, Inc.** was founded in 1961 and operates **149 branch locations across 31 states**, making it **one of the largest rental equipment companies in the nation**[57](index=57&type=chunk) [(2) Significant Accounting Policies](index=13&type=section&id=(2)%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies and confirms no material changes during the period. - **No significant changes** to accounting policies occurred during the three and six months ended **June 30, 2024**, compared to the Annual Report on Form 10-K for **December 31, 2023**[58](index=58&type=chunk) - The condensed consolidated financial statements are presented on an unclassified basis, as short-term obligations are typically met by cash flows from long-term assets[54](index=54&type=chunk) [Revenue Recognition](index=13&type=section&id=Revenue%20Recognition) This note outlines the company's policies for recognizing revenue from equipment rentals and sales, adhering to relevant accounting standards. - Revenue is recognized under FASB ASC Topic 606 for goods/services transferred and Topic 842 for equipment rental contracts as operating leases[70](index=70&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) | Revenues (in thousands) | Topic 842 (3 Months) | Topic 606 (3 Months) | Total (3 Months) | Topic 842 (6 Months) | Topic 606 (6 Months) | Total (6 Months) | | :---------------------- | :------------------- | :------------------- | :--------------- | :------------------- | :------------------- | :--------------- | | Equipment rentals | $291,909 | $20,447 | $312,356 | $568,505 | $39,176 | $607,681 | | Sales of rental equipment | — | $34,937 | $34,937 | — | $83,052 | $83,052 | | Sales of new equipment | — | $10,670 | $10,670 | — | $21,082 | $21,082 | | Parts, service and other | — | $18,319 | $18,319 | — | $35,824 | $35,824 | | Total revenues | $291,909 | $84,373 | $376,282 | $568,505 | $179,134 | $747,639 | [Receivables and contract assets and liabilities](index=17&type=section&id=Receivables%20and%20contract%20assets%20and%20liabilities) This note details the company's policies for managing receivables, estimating bad debt, and assessing credit risk. - The allowance for doubtful accounts is estimated using a loss rate model based on delinquency, historical experience, economic circumstances, and forecasts[64](index=64&type=chunk) - Bad debt expense as a percentage of total revenues was **approximately 0.4%** for the six months ended **June 30, 2024**, compared to **0.3%** for the same period in 2023[64](index=64&type=chunk) - Credit risk is limited due to a geographically diverse customer base, with **no single customer accounting for more than 10% of total revenues**[76](index=76&type=chunk) [Goodwill](index=17&type=section&id=Goodwill) This note provides an overview of the company's goodwill, including changes resulting from acquisitions. | Goodwill Activity (in thousands) | Amount | | :------------------------------- | :---------- | | Balance at December 31, 2023 | $108,155 | | Increase (Precision Acquisition) | $17,536 | | Decrease (Giffin Adjustment) | $(100) | | Increase (Lewistown Acquisition) | $8,401 | | Increase (Precision Adjustment) | $651 | | Balance at June 30, 2024 | $134,643 | - **Goodwill increased to $134.6 million** as of **June 30, 2024**, primarily due to the **Precision Rentals and Lewistown Rentals acquisitions**[65](index=65&type=chunk)[87](index=87&type=chunk) [Rental Equipment](index=19&type=section&id=Rental%20Equipment) This note describes the accounting policies for rental equipment, including classification and depreciation methods. - Purchases of equipment designated for fleet are now recorded as rental equipment, while equipment for sale is recorded as inventory, reflecting the company's shift to a **pure-play rental model**[88](index=88&type=chunk) - Rental equipment is depreciated using the straight-line method over estimated useful lives (e.g., aerial work platforms over **10 years**, earthmoving over **5 years** with **25% salvage value**)[88](index=88&type=chunk) [Recent Accounting Pronouncements](index=19&type=section&id=Recent%20Accounting%20Pronouncements) This note discusses the impact of recently adopted and issued accounting standards on the company's financial reporting. - **ASU No. 2023-07 (Segment Reporting)** became **effective January 1, 2024**, and will result in expanded reportable segment disclosures but is **not expected to impact financial statements**[78](index=78&type=chunk) - **ASU No. 2023-09 (Income Taxes)** becomes **effective January 1, 2025**, and will improve income tax disclosures but is **not expected to impact financial statements**[79](index=79&type=chunk) [(3) Acquisitions and Dispositions](index=19&type=section&id=(3)%20Acquisitions%20and%20Dispositions) This note details the company's recent acquisition activities, including their impact on market presence and financial performance. - Completed the acquisition of **Lewistown Rentals (Montana)** **effective May 1, 2024**, expanding presence in the Montana market[80](index=80&type=chunk)[159](index=159&type=chunk) - Completed the acquisition of **Precision Rentals (Arizona and Colorado)** **effective January 1, 2024**, expanding presence in both geographic markets[110](index=110&type=chunk)[183](index=183&type=chunk) - Completed the acquisition of **Giffin Equipment (California)** **effective November 1, 2023**, expanding presence in the California market[114](index=114&type=chunk)[158](index=158&type=chunk) | Pro Forma Financial Information (in thousands) | Three Months Ended June 30, 2024 | Pro Forma Ended June 30, 2023 | | :--------------------------------------------- | :------------------------------- | :---------------------------- | | Total revenues | $377,009 | $373,444 | | Net income | $33,199 | $40,623 | [(4) Fair Value of Financial Instruments](index=26&type=section&id=(4)%20Fair%20Value%20of%20Financial%20Instruments) This note provides information on the fair value of the company's financial instruments, comparing carrying amounts to fair values. - The **carrying value of cash, accounts receivable, Credit Facility, accounts payable, and accrued expenses approximate fair value** due to their immediate or short-term nature[141](index=141&type=chunk) | Financial Instrument (in thousands) | June 30, 2024 Carrying Amount | June 30, 2024 Fair Value | December 31, 2023 Carrying Amount | December 31, 2023 Fair Value | | :---------------------------------- | :---------------------------- | :----------------------- | :-------------------------------- | :--------------------------- | | Manufacturer flooring plans payable | $2,642 | $2,224 | $2,708 | $2,490 | | Senior Unsecured Notes due 2028 | $1,243,573 | $1,128,213 | $1,242,852 | $1,137,170 | [(5) Stockholders' Equity](index=26&type=section&id=(5)%20Stockholders'%20Equity) This note details changes in stockholders' equity, including stock-based compensation, dividends, and stock repurchases. | Stockholders' Equity Activity (in thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------------------- | :----------------------------- | :----------------------------- | | Balances at December 31, 2023 | $534,289 | N/A | | Stock-based compensation | $5,990 | $5,029 | | Cash dividends declared | $(19,992) | $(19,840) | | Issuance of common stock, net | $2 | $1 | | Repurchase of restricted common stock | $(3,390) | $(3,226) | | Net income | $59,150 | $66,890 | | Balances at June 30, 2024 | $576,049 | N/A | [(6) Stock-Based Compensation](index=27&type=section&id=(6)%20Stock-Based%20Compensation) This note describes the company's stock-based compensation plans and the associated expense recognition. - **Unrecognized compensation expense related to non-vested stock was approximately $10.2 million** as of **June 30, 2024**, expected to be recognized over a **weighted-average period of 1.5 years**[127](index=127&type=chunk) | Compensation Expense (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Compensation expense | $2,202 | $2,039 | $5,990 | $5,029 | [(7) Income per Share](index=29&type=section&id=(7)%20Income%20per%20Share) This note presents the calculation of basic and diluted earnings per share and dividends declared per share. | EPS Metric | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Basic Net Income Per Share | $0.92 | $1.14 | $1.63 | $1.86 | | Diluted Net Income Per Share | $0.91 | $1.14 | $1.62 | $1.84 | | Dividends Declared Per Share | $0.275 | $0.275 | $0.55 | $0.55 | [(8) Senior Secured Credit Facility](index=29&type=section&id=(8)%20Senior%20Secured%20Credit%20Facility) This note details the company's senior secured credit facility, including outstanding amounts and interest rates. - As of **June 30, 2024**, the company had **$287.3 million outstanding under its $750.0 million Credit Facility**, with **$450.4 million available borrowings (net of $12.3 million outstanding letters of credit)**[150](index=150&type=chunk) - The **weighted average interest rate under the Credit Facility was approximately 7.2%** as of **June 30, 2024**[150](index=150&type=chunk) [(9) Senior Unsecured Notes](index=31&type=section&id=(9)%20Senior%20Unsecured%20Notes) This note provides information on the company's senior unsecured notes, including their principal amount and maturity. - The company has **$1.25 billion in 3.875% Senior Unsecured Notes due December 15, 2028**, with **no principal payments due until maturity**[44](index=44&type=chunk)[132](index=132&type=chunk) | Senior Unsecured Notes (in thousands) | Amount | | :------------------------------------ | :---------- | | Balance at December 31, 2023 | $1,242,852 | | Accretion of discount through June 30, 2024 | $586 | | Amortization of deferred financing costs through June 30, 2024 | $135 | | Balance at June 30, 2024 | $1,243,573 | [(10) Leases](index=31&type=section&id=(10)%20Leases) This note outlines key details of the company's operating and finance leases, including remaining terms and discount rates. - As of **June 30, 2024**, the **weighted average remaining lease term for operating leases was approximately 7.4 years (discount rate 6.4%)** and for **finance leases was approximately 8.5 years (discount rate 6.0%)**[133](index=133&type=chunk) [(11) Segment Information](index=31&type=section&id=(11)%20Segment%20Information) This note provides financial information by reportable segment, detailing revenues and gross profit for each business line. - The company operates **four reportable segments: equipment rentals (primary), sales of rental equipment, sales of new equipment, and parts, service and other revenues**. The **'parts sales and service revenues' segment was aggregated during Q2 2024**[134](index=134&type=chunk)[162](index=162&type=chunk) | Segment Revenues (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equipment rentals | $312,356 | $291,459 | $607,681 | $553,467 | | Sales of rental equipment | $34,937 | $39,653 | $83,052 | $71,768 | | Sales of new equipment | $10,670 | $8,857 | $21,082 | $16,675 | | Parts, service and other | $18,319 | $20,263 | $35,824 | $40,804 | | Total revenues | $376,282 | $360,232 | $747,639 | $682,714 | | Segment Gross Profit (in thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :---------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Equipment rentals | $142,247 | $136,439 | $270,144 | $250,733 | | Sales of rental equipment | $21,817 | $23,438 | $52,103 | $42,265 | | Sales of new equipment | $1,798 | $1,322 | $3,571 | $2,359 | | Parts, service and other | $5,418 | $7,162 | $10,327 | $14,382 | | Total gross profit | $171,280 | $168,361 | $336,145 | $309,739 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial performance, condition, and cash flows for the three and six months ended June 30, 2024. [Overview](index=33&type=section&id=Overview) This section provides a high-level introduction to H&E Equipment Services, Inc. as a leading rental equipment company. - **H&E Equipment Services, Inc.** is **one of the largest rental equipment companies in the nation**, operating **149 branch locations across 31 states**[138](index=138&type=chunk) [Background](index=33&type=section&id=Background) This section outlines the company's strategic transition to a pure-play rental model and highlights its fleet characteristics. - The company has **successfully transitioned to a pure-play rental company**, leveraging its operating experience and extensive infrastructure[182](index=182&type=chunk) - The construction rental fleet is **among the industry's youngest**, comprising aerial work platforms, earthmoving, material handling, and other general and specialty lines[182](index=182&type=chunk) [Critical Accounting Policies](index=33&type=section&id=Critical%20Accounting%20Policies) This section confirms no significant changes to critical accounting estimates during the reporting period. - **No significant changes to critical accounting estimates** (e.g., useful lives of rental equipment, acquisition accounting, goodwill, income taxes) occurred during the three and six months ended **June 30, 2024**[160](index=160&type=chunk) [Business Segments](index=35&type=section&id=Business%20Segments) This section describes the company's four reportable business segments and recent aggregation changes. - The company has **four reportable segments: equipment rentals (principal focus), sales of rental equipment, sales of new equipment, and parts, service and other revenues**[162](index=162&type=chunk) - The **'parts sales and service revenues' segment was aggregated into one during the quarter ended June 30, 2024**, due to revised internal reporting[162](index=162&type=chunk) [Revenue Sources](index=35&type=section&id=Revenue%20Sources) This section details the primary sources of company revenue and the external factors influencing them. - For the six months ended **June 30, 2024**, **equipment rentals accounted for approximately 81.0% of total revenues**, sales of rental equipment **11.0%**, sales of new equipment **3.0%**, and parts, service and other revenues **5.0%**[163](index=163&type=chunk) - Total revenues are affected by demand for equipment, rental rates, construction/industrial activity, customer spending, weather, supply chain, commodity prices, and general economic conditions[163](index=163&type=chunk) [Principal Costs and Expenses](index=37&type=section&id=Principal%20Costs%20and%20Expenses) This section outlines the main components of the company's cost of revenues and operating expenses. - **Total cost of revenues for the six months ended June 30, 2024, was $411.5 million**, primarily comprising rental expenses, rental depreciation, and costs of equipment sales[165](index=165&type=chunk) - **Selling, general and administrative (SG&A) expenses increased $31.5 million (16.2%) to $226.1 million** for the six months ended **June 30, 2024**, with **$20.8 million attributable to expansion efforts**[40](index=40&type=chunk)[165](index=165&type=chunk)[238](index=238&type=chunk) - **Interest expense increased due to higher borrowings on the Credit Facility**[172](index=172&type=chunk)[205](index=205&type=chunk)[258](index=258&type=chunk) [Principal Cash Flows](index=37&type=section&id=Principal%20Cash%20Flows) This section describes the primary sources and uses of the company's cash, focusing on operational and investment activities. - **Cash is primarily generated from operating activities and used to fund new equipment purchases, working capital, capital expenditures, growth opportunities, and debt service**[192](index=192&type=chunk) [Rental Fleet](index=39&type=section&id=Rental%20Fleet) This section provides details on the company's rental fleet, including its net book value, unit count, and composition. - The **net book value of the rental fleet was $1.9 billion (approximately 67.0% of total assets)** as of **June 30, 2024**, consisting of **61,543 units with an original acquisition cost of $2.9 billion**[194](index=194&type=chunk) - The **original acquisition cost of the gross rental fleet increased by approximately $97.3 million (3.5%)** for the six months ended **June 30, 2024**, while the **average age increased by 0.3 months**[176](index=176&type=chunk) | Rental Fleet Composition (June 30, 2024) | Units | % of Total Units | Original Acquisition Cost (millions) | % of Original Acquisition Cost | Average Age in Months | | :--------------------------------------- | :----- | :--------------- | :----------------------------------- | :----------------------------- | :-------------------- | | Aerial Work Platforms | 28,130 | 45.7% | $957.7 | 33.2% | 52.0 | | Earthmoving | 8,494 | 13.8% | $738.7 | 25.6% | 27.4 | | Material Handling Equipment | 10,466 | 17.0% | $856.3 | 29.6% | 40.8 | | Other | 14,453 | 23.5% | $335.5 | 11.6% | 23.5 | | Total | 61,543 | 100.0% | $2,888.2 | 100.0% | 40.0 | [Principal External Factors that Affect our Businesses](index=39&type=section&id=Principal%20External%20Factors%20that%20Affect%20our%20Businesses) This section discusses key external factors, such as economic conditions and regulatory changes, that influence the company's operations. - The demand for products is dependent on general economic conditions, including geopolitical factors, credit market stability, inflationary pressures, and increasing interest rates[217](index=217&type=chunk) - Business is impacted by customer spending levels in the construction and industrial sectors, adverse weather conditions, and regional/industry-specific trends[217](index=217&type=chunk)[218](index=218&type=chunk) - Compliance with environmental and occupational health and safety laws, as well as climate change regulations, could affect operations and increase expenditures[218](index=218&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, comparing revenues and gross profits across different periods and segments. [Three Months Ended June 30, 2024 Compared to the Three Months Ended June 30, 2023](index=41&type=section&id=Three%20Months%20Ended%20June%2030,%202024%20Compared%20to%20the%20Three%20Months%20Ended%20June%2030,%202023) This section provides a comparative analysis of the company's financial results for the three months ended June 30, 2024, versus the prior year. | Revenue Category (in thousands) | 3 Months Ended June 30, 2024 | 3 Months Ended June 30, 2023 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Equipment rentals | $312,356 | $291,459 | $20,897 | 7.2% | | Sales of rental equipment | $34,937 | $39,653 | $(4,716) | (11.9)% | | Sales of new equipment | $10,670 | $8,857 | $1,813 | 20.5% | | Parts, service and other | $18,319 | $20,263 | $(1,944) | (9.6)% | | Total revenues | $376,282 | $360,232 | $16,050 | 4.5% | | Gross Profit Category (in thousands) | 3 Months Ended June 30, 2024 | 3 Months Ended June 30, 2023 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Equipment rentals | $142,247 | $136,439 | $5,808 | 4.3% | | Sales of rental equipment | $21,817 | $23,438 | $(1,621) | (6.9)% | | Sales of new equipment | $1,798 | $1,322 | $476 | 36.0% | | Parts, service and other | $5,418 | $7,162 | $(1,744) | (24.4)% | | Total gross profit | $171,280 | $168,361 | $2,919 | 1.7% | - **Average rental rates increased 1.9% YoY but decreased 0.1% QoQ**. Rental equipment dollar utilization **decreased 2.0% to 38.6%**, and time utilization **decreased 2.9% to 66.4%**, largely due to **increased fleet size**[219](index=219&type=chunk) [Six Months Ended June 30, 2024 Compared to the Six Months Ended June 30, 2023](index=45&type=section&id=Six%20Months%20Ended%20June%2030,%202024%20Compared%20to%20the%20Six%20Months%20Ended%20June%2030,%202023) This section provides a comparative analysis of the company's financial results for the six months ended June 30, 2024, versus the prior year. | Revenue Category (in thousands) | 6 Months Ended June 30, 2024 | 6 Months Ended June 30, 2023 | Change ($) | Change (%) | | :------------------------------ | :--------------------------- | :--------------------------- | :--------- | :--------- | | Equipment rentals | $607,681 | $553,467 | $54,214 | 9.8% | | Sales of rental equipment | $83,052 | $71,768 | $11,284 | 15.7% | | Sales of new equipment | $21,082 | $16,675 | $4,407 | 26.4% | | Parts, service and other | $35,824 | $40,804 | $(4,980) | (12.2)% | | Total revenues | $747,639 | $682,714 | $64,925 | 9.5% | | Gross Profit Category (in thousands) | 6 Months Ended June 30, 2024 | 6 Months Ended June 30, 2023 | Change ($) | Change (%) | | :----------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Equipment rentals | $270,144 | $250,733 | $19,411 | 7.7% | | Sales of rental equipment | $52,103 | $42,265 | $9,838 | 23.3% | | Sales of new equipment | $3,571 | $2,359 | $1,212 | 51.4% | | Parts, service and other | $10,327 | $14,382 | $(4,055) | (28.2)% | | Total gross profit | $336,145 | $309,739 | $26,406 | 8.5% | - **Average rental rates increased 2.4% YoY**. Rental equipment dollar utilization **decreased 1.8% to 37.8%**, and time utilization **decreased 3.3% to 65.0%**, largely due to **increased fleet size**[209](index=209&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial flexibility, cash management, and capital structure, including debt facilities and dividend policies. [Senior Secured Credit Facility](index=50&type=section&id=Senior%20Secured%20Credit%20Facility) This section details the company's senior secured credit facility, including outstanding amounts and available borrowings. - As of **June 30, 2024**, the company had **$287.3 million borrowed under its $750.0 million Credit Facility**, with **$450.4 million available borrowings (net of $12.3 million outstanding letters of credit)**[263](index=263&type=chunk) - As of **July 23, 2024**, **available borrowings under the Credit Facility were $437.3 million**[46](index=46&type=chunk)[263](index=263&type=chunk) [Senior Unsecured Notes](index=50&type=section&id=Senior%20Unsecured%20Notes) This section provides information on the company's senior unsecured notes, including their principal amount and maturity. - The company has **$1.25 billion in 3.875% Senior Unsecured Notes due December 15, 2028**, with **no principal payments due until maturity**[44](index=44&type=chunk)[262](index=262&type=chunk) [Cash Requirements Related to Operations](index=50&type=section&id=Cash%20Requirements%20Related%20to%20Operations) This section outlines the company's capital expenditures for its rental fleet and property and equipment. - **Gross rental fleet capital expenditures for the six months ended June 30, 2024, were approximately $196.5 million**, a **decrease from $375.1 million in the prior year**, reflecting **normalization of fleet purchasing**[242](index=242&type=chunk) - **Gross property and equipment capital expenditures for the six months ended June 30, 2024, were $77.1 million**, **up from $33.4 million in the prior year**[242](index=242&type=chunk) [Quarterly Dividend](index=51&type=section&id=Quarterly%20Dividend) This section reports on the company's recent quarterly dividend declaration and payment. - A **quarterly dividend of $0.275 per share** was announced on **May 16, 2024**, and **paid on June 14, 2024, totaling approximately $10.0 million**[264](index=264&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's exposure to market risks, primarily focusing on interest rate fluctuations affecting its Credit Facility. - The company's earnings may be affected by changes in interest rates, as **interest expense on the Credit Facility is calculated based on variable rates (Base Rate or SOFR plus applicable margins)**[266](index=266&type=chunk) - **No significant changes in market risk exposure were noted** during the three and six months ended **June 30, 2024**[266](index=266&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes in internal control over financial reporting during the quarter. [Management's Quarterly Evaluation of Disclosure Controls and Procedures](index=51&type=section&id=Management's%20Quarterly%20Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures as of June 30, 2024. - The Chief Executive Officer and Chief Financial Officer concluded that the company's **disclosure controls and procedures were effective as of June 30, 2024**[267](index=267&type=chunk) [Changes in Internal Control Over Financial Reporting](index=51&type=section&id=Changes%20in%20Internal%20Control%20Over%20Financial%20Reporting) This section reports no material changes in internal control over financial reporting during the three months ended June 30, 2024. - There were **no changes in the company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, internal control over financial reporting** during the three months ended **June 30, 2024**[268](index=268&type=chunk) [PART II. OTHER INFORMATION](index=33&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section contains additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits. [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) This section addresses legal claims and actions, stating that management believes their ultimate disposition will not materially affect the company's financial position, results of operations, or liquidity. - The company is **involved in various claims and legal actions** arising in the ordinary course of business[269](index=269&type=chunk)[271](index=271&type=chunk) - Management, after consulting with legal counsel, believes the **ultimate disposition of these matters will not have a material adverse effect on the company's consolidated financial position, results of operations, or liquidity**[269](index=269&type=chunk)[271](index=271&type=chunk) [Item 1A. Risk Factors](index=53&type=section&id=Item%201A.%20Risk%20Factors) This section confirms that there have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2023. - **No material changes to the company's risk factors previously disclosed** in the **Annual Report on Form 10-K for the year ended December 31, 2023**, have occurred as of the date of this Quarterly Report[272](index=272&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=53&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section indicates that there were no unregistered sales of equity securities or use of proceeds to report for the period. - **No unregistered sales of equity securities or use of proceeds to report** for the period[252](index=252&type=chunk) [Item 3. Defaults upon Senior Securities](index=53&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) This section states that there were no defaults upon senior securities to report for the period. - **Not applicable**, indicating **no defaults upon senior securities to report** for the period[275](index=275&type=chunk) [Item 4. Mine Safety Disclosures](index=53&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no mine safety disclosures to report for the period. - **Not applicable**, indicating **no mine safety disclosures to report** for the period[275](index=275&type=chunk) [Item 5. Other Information](index=53&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report for the period. - **No other information to report** for the period[252](index=252&type=chunk) [Item 6. Exhibits](index=53&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including certifications and XBRL documents. - Exhibits filed include **certifications pursuant to Section 302 and 906 of the Sarbanes-Oxley Act of 2002, Inline XBRL Instance Document, and Inline XBRL Taxonomy Extension Schema**[253](index=253&type=chunk) [Signatures](index=54&type=section&id=Signatures) The report is signed by the Chief Executive Officer and Chief Financial Officer of H&E Equipment Services, Inc. on July 30, 2024. - The report was **signed by Bradley W. Barber, Chief Executive Officer and Director, and Leslie S. Magee, Chief Financial Officer and Secretary, on July 30, 2024**[53](index=53&type=chunk)[255](index=255&type=chunk)

Rental Fleet Selling, General and Administrative Expenses Exhibit 99.1 News Release SECOND QUARTER 2024 SUMMARY WITH A COMPARISON TO SECOND QUARTER 2023 We use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin in our business operations to, among other things, evaluate the performance of our business, develop budgets and measure our performance against those budgets. We also believe that analysts and investors use EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin as supplemental measures to evaluate a com ...

Company Performance - H&E Equipment reported quarterly earnings of $0.91 per share, missing the Zacks Consensus Estimate of $1 per share, and down from $1.14 per share a year ago, representing an earnings surprise of -9% [1] - The company posted revenues of $376.28 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 3.19%, compared to year-ago revenues of $360.23 million [2] - Over the last four quarters, H&E Equipment has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Market Comparison - H&E Equipment shares have added about 1.2% since the beginning of the year, while the S&P 500 has gained 14.5% [3] - The current consensus EPS estimate for the coming quarter is $1.28 on revenues of $416.85 million, and for the current fiscal year, it is $4.13 on revenues of $1.58 billion [7] Industry Outlook - The Manufacturing - Construction and Mining industry, to which H&E Equipment belongs, is currently in the bottom 19% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can impact H&E Equipment's stock performance [5][6]

BATON ROUGE, La., July 30, 2024 (GLOBE NEWSWIRE) -- H&E Equipment Services, Inc. (NASDAQ: HEES) ("H&E", the "Company") today reported financial results for the second quarter ended June 30, 2024, including further expansion of its branch network which now extends to 31 states. SECOND QUARTER 2024 SUMMARY WITH A COMPARISON TO SECOND QUARTER 2023 Revenues increased 4.5% to $376.3 million compared to $360.2 million. Net income was $33.3 million compared to $41.2 million. The effective income tax rate was 27.8% ...

H&E Equipment is part of the Zacks Manufacturing - Construction and Mining industry. Caterpillar (CAT) , another stock in the same industry, closed the last trading session 4.3% higher at $360.58. CAT has returned 7.3% in the past month. For Caterpillar, the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $5.58. This represents a change of +0.5% from what the company reported a year ago. Caterpillar currently has a Zacks Rank of #3 (Hold). H&E Equipment (HEES) sh ...