The following is a summary of the Herc Holdings Inc. (HRI) Q1 2024 Earnings Call Transcript:
Financial Performance:
Herc Holdings posted a record-high revenue and adjusted EBITDA for Q1 2024, with a 5% increase in rental rate year-over-year.
The adjusted EBITDA margin in Q1 was enhanced by operating leverage and early recovery in the Studio Entertainment market.
Incremental progress in operating efficiencies resulted in a 10% increase in adjusted EBITDA over the previous year.
A roughly 100 basis point difference was reported in expectation for a lower amount of used equipment sales compared to 2023.
Business Progress:
The company completed four strategic acquisitions and opened four greenfield locations in key markets in Q1 2024.
Investments were made into high-margin ProSolutions fleet to meet growing demand.
The company enhanced digital capabilities to improve customer experience.
Herc Rentals' business operating system E3OS is being rolled out for better customer experiences and increased operating leverage.
Investments into requisite fleet management have been moderated to focus on improving fleet efficiency.
Herc Holdings is targeting a 60/40 revenue split between local and national accounts in the long term.
A large trench shoring acquisition was carried out, expected to trade at a higher multiple than their general rents business.
Negotiations and due diligence are ongoing with parties for the Cinelease business, expected to be disposed of within the year.
More details: Herc Holdings IR
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