H&E Rentals Reports Fourth Quarter and Full Year 2024 Results

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]