The following is a summary of the H&E Equipment Services, Inc. (HEES) Q1 2024 Earnings Call Transcript:
Financial Performance:
H&E Equipment Services Inc. reported a growth of 15.2% in total revenues, amounting to $371.4 million in Q1 2024 compared to Q1 2023.
The company's revenues from equipment rental improved by 12.7%, while sales of rental equipment rose by 49.8% year-over-year.
Sales of new equipment also improved, rising to $10.4 million in Q1, 33.2% ahead of the same period last year.
The company's gross profit totalled $164.9 million, up by 16.6%.
H&E reported an adjusted EBITDA margin of 43.6% in the quarter, a 13.1% improvement from the previous year.
Business Progress:
H&E continues successful expansion efforts with significant growth in its branch network and rental fleet.
The company has undertaken Sectors contributing to this growth are construction of data centers, semiconductor fabrication facilities, green energy projects, road and highway construction, and transportation facilities.
The company has moderated its 2024 guidance for gross fleet investment in light of expected slowing industry growth.
H&E has grown its branch network by over 40% in the past three years and continues to focus on future expansions, with 12-15 new locations planned for this year.
Despite a projected decrease in CapEx for the next year, plans to sustain and even augment rental fleet inventory are in place.
H&E intends to utilize acquired entities for growth, with one such acquisition already completed and another on the horizon. They also achieved record margins on equipment sales due to optimal fleet age and strong used equipment markets.
The company has also observed improved rental rates and utilization and expects to generate substantial free cash flow in the upcoming quarters.
More details: H&E Equipment Services IR
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