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H&E Equipment Services, Inc. Reports Fourth Quarter and Full Year 2021 Results

H&E Equipment Services, Inc. (NASDAQ: HEES) (“H&E”, the “Company”) today announced results for the fourth quarter and full year ended December 31, 2021, highlighting the excellent quarter and year-over-year performance as strong business activity and strategic initiatives advanced results. On October 1, 2021, the Company sold its crane business, (the “Crane Sale”). All results and comparisons for the periods reported are presented on a continuing operations basis with the Crane Sale reported as discontinued operations in certain statements and schedules accompanying this report.

FOURTH QUARTER 2021 SUMMARY

  • Revenues increased 5.1% in the fourth quarter of 2021 to $281.3 million compared to $267.7 million in the fourth quarter of 2020.
  • Net income was $21.7 million in the fourth quarter of 2021 compared to a net loss of $21.3 million in the fourth quarter of 2020, which included a non-recurring pre-tax charge totaling $44.6 million associated with the early extinguishment of debt. Adjusting for the non-recurring item, the Company would have reported net income of $12.3 million in the fourth quarter of 2020. The effective income tax rate was 25.8% in the fourth quarter of 2021 compared to a tax benefit of 26.3% in the fourth quarter of 2020, or an effective tax rate of 21.7% following adjustment for the non-recurring item.
  • Adjusted EBITDA increased 18.4% in the fourth quarter of 2021 to $110.4 million compared to $93.3 million in the fourth quarter of 2020, yielding a margin of 39.3% of revenues compared to 34.8% over the same period of comparison.
  • Total equipment rental revenues for the fourth quarter of 2021 were $203.7 million, an increase of $40.8 million, or 25.1%, compared to $162.9 million in the fourth quarter of 2020. Rental revenues for the fourth quarter of 2021 were $182.0 million, an increase of $36.0 million, or 24.7%, compared to $146.0 million in the fourth quarter of 2020.
  • Used equipment sales decreased 34.3% in the fourth quarter of 2021 to $29.5 million compared to $44.9 million in the same quarter of 2020. Margins in the fourth quarter improved to 39.3% compared to 31.6% a year ago.
  • New equipment sales totaled $22.5 million in the fourth quarter of 2021, a decline of 33.3% when compared to $33.8 million in the fourth quarter of 2020.
  • Gross margin improved to 42.0% in the fourth quarter of 2021 compared to 35.2% in the same quarter of 2020.
  • Total equipment rental gross margins were 46.3% in the fourth quarter of 2021 compared to 40.7% in the same quarter of 2020. Rental gross margins were 51.7% compared to 45.5% over the same period of comparison.
  • Average time utilization (based on original equipment cost) in the fourth quarter of 2021 was 73.1% compared to 65.6% in the same quarter in 2020 and 71.9% in the third quarter of 2021. The Company’s rental fleet based on original acquisition cost ended 2021 at approximately $1.9 billion, representing a 10.0% increase from 2020.
  • Average rental rates improved 4.7% in the fourth quarter of 2021 when compared to a year ago and 1.5% when compared to the third quarter of 2021.
  • Dollar utilization improved to 39.3% in the fourth quarter of 2021 compared to 34.1% in the fourth quarter of 2020.
  • Average rental fleet age on December 31, 2021, was 40.3 months compared to an industry average age of 53.0 months.
  • Paid regular quarterly cash dividend of $0.275 per share of common stock.

Commenting on the significant drivers of fourth quarter performance, Brad Barber, Chief Executive Officer of H&E Equipment Services, Inc. stated, “Strong customer demand for our rental fleet persisted well into the final quarter of 2021, resulting in higher average physical utilization and rental rate appreciation. Fourth quarter average physical utilization of 73.1% was exceptional, representing a 750 and 440 basis point improvement when compared to average utilization measures in the same quarters of 2020 and 2019, respectively, while it was 120 basis points above the third quarter of 2021. Accompanying the strong average utilization was an improvement in rental rates of 4.7% when compared to the fourth quarter of 2020, representing a gain of 1.5% on a sequential quarterly basis. With the advances in these critical industry benchmarks, we reported sequential quarterly improvement in rental revenues and adjusted EBITDA while demonstrating excellence throughout the operation.”

Addressing the strong industry dynamics, Mr. Barber noted, “Favorable industry trends remain in place, providing abundant opportunities for growth in 2022. Of note, feedback from our customers suggests elevated equipment rental demand is likely to persist through 2022 with broadening activity in the non-residential construction and industrial end markets. Strong performance in 2021 of key industry measures of future construction activity support the likelihood for further expansion in 2022 of these important end markets. In addition, the recently passed Bipartisan Infrastructure Bill is expected to supplement demand for our fleet as our customers outline growing needs in 2022 ahead of government appropriation. Finally, the planned growth of our equipment rental fleet in 2022 underscores our confidence in a fundamentally robust cycle. Following 2021 gross capital expenditures of $437 million, gross expenditures in 2022 are expected to range from $550 million to $600 million, representing the largest annual gross spend in the Company’s history. The spending increase of near 40% year-over-year is expected to position H&E to meet intensified customer demand in 2022 and beyond.”

Concluding, Mr. Barber emphasized the success of H&E’s strategic execution, stating, “During 2021, we took important strategic steps to advance the transformation of H&E to a pure play rental business. These steps included continued investment in our rental fleet, which grew 10.0% in 2021, and the steady expansion of our branch network, as we added 10 new locations in regions with promising growth prospects. At the same time, we significantly reduced our exposure to the distribution business, ending the year as a pure play rental operation in 23 of the 24 states where we currently operate. As we enter 2022, successful execution of strategic initiatives has improved H&E’s competitive position in the equipment rental industry. Our young and versatile fleet is growing, and in 2022 we should experience the largest gross investment in our Company’s 60-year history. Also, we expect our geographic footprint to expand in 2022 with our branch count expected to grow by more than 10 locations, including two new branches expected to be added in the first quarter that will provide increased access to new customers in expanding markets. Finally, our consolidated focus on rental operations has positioned the Company for higher and increasingly more stable revenues through the cycle with margin appreciation. Meanwhile, our financial capacity, as evidenced by a conservative balance sheet and excellent liquidity position, provides a strong avenue for strategic growth.”

FINANCIAL DISCUSSION FOR FOURTH QUARTER 2021

Revenue

Total revenues increased 5.1% to $281.3 million in the fourth quarter of 2021 from $267.7 million in the fourth quarter of 2020. Total equipment rental revenues increased 25.1% to $203.7 million compared to $162.9 million in the fourth quarter of 2020. Rental revenues increased 24.7% to $182.0 million compared to $146.0 million in the fourth quarter of 2020. Used equipment sales decreased 34.3% to $29.5 million compared to $44.9 million in the same quarter of 2020. New equipment sales decreased 33.3% to $22.5 million compared to $33.8 million in the same quarter of 2020. Parts sales of $15.7 million were unchanged from the fourth quarter of 2020 while service revenues of $8.3 million decreased 4.6% compared to $8.7 million over the same period of comparison.

Gross Profit

Gross profit increased 25.6% in the fourth quarter of 2021 to $118.2 million compared to $94.1 million in the fourth quarter of 2020. Gross margin of 42.0% for the fourth quarter of 2021 compared to 35.2% for the fourth quarter of 2020. On a segment basis, gross margin on total equipment rentals was 46.3% in the fourth quarter of 2021 compared to 40.7% in the fourth quarter of 2020. Rental margins were 51.7% compared to 45.5% over the same period of comparison. On average, rental rates in the fourth quarter of 2021 were 4.7% better than rates in the fourth quarter of 2020. Time utilization (based on original equipment cost) was 73.1% in the fourth quarter of 2021 compared to 65.6% in the fourth quarter of 2020. Gross margins on used equipment sales were 39.3%, up from 31.6% over the same period of comparison. Gross margins on new equipment sales improved to 14.5% in the fourth quarter of 2021 compared to 10.2% in the fourth quarter of 2020. Gross margins on parts sales and service revenues were 25.8% and 63.5%, respectively, in the fourth quarter of 2021 and compared to gross margins of 25.9% and 67.6%, respectively, over the same period of comparison.

Rental Fleet

At the end of the fourth quarter of 2021, the original acquisition cost of the Company’s rental fleet was approximately $1.9 billion, which represented a 10.0%, or $169.7 million increase from the end of the fourth quarter of 2020. Dollar utilization for the fourth quarter of 2021 improved to 39.3% compared to 34.1% in the fourth quarter of 2020.

Selling, General and Administrative Expenses

SG&A expenses for the fourth quarter of 2021 were $76.9 million, an increase of $11.4 million, or 17.4%, compared to $65.5 million in the fourth quarter of 2020. The higher expenses were primarily due to a $9.2 million increase in employee salaries, wages, incentive compensation related to increased profitability, payroll taxes and related employee benefits, a $1.4 million increase in facilities and promotional expenses, and a $0.7 million increase in professional fees. These items were partially offset by a $0.5 million decrease in supplies. SG&A expenses in the fourth quarter of 2021 as a percentage of total revenues were 27.3% compared to 24.4% in the fourth quarter of 2020. Approximately $3.7 million of SG&A expenses in the fourth quarter of 2021 were attributable to warm start branches opened since the fourth quarter of 2020.

Income from Operations

Income from operations for the fourth quarter of 2021 was $41.6 million, or 14.8% of revenues, compared to $30.1 million, or 11.2% of revenues.

Interest Expense

Interest expense was $13.5 million for the fourth quarter of 2021, a reduction of 12.0% when compared to $15.3 million for the fourth quarter of 2020.

Net Income

Net income in the fourth quarter of 2021 was $21.7 million, or $0.59 per diluted share, compared to a loss in the fourth quarter of 2020 of $21.3 million, or $0.59 per diluted share. Adjusting for the previously noted non-recurring charge, the Company would have reported net income for the fourth quarter of 2020 of $12.3 million, or $0.34 per diluted share. The effective income tax rate for the fourth quarter of 2021 was 25.8% compared to a tax benefit of 26.3% in the same quarter of 2020, or an effective tax rate of 21.7%, when adjusted for the non-recurring item.

Adjusted EBITDA

Adjusted EBITDA in the fourth quarter of 2021 increased 18.4% to $110.4 million, or 39.3% of revenues compared to $93.3 million, or 34.8% of revenues, in the fourth quarter of 2020.

FINANCIAL DISCUSSION FOR THE YEAR ENDED DECEMBER 31, 2021

Full-year results for 2020 include non-recurring pre-tax charges of $55.7 million, resulting from an interim goodwill impairment charge (first quarter), and $44.6 million associated with the early extinguishment of debt (fourth quarter).

Revenue

Revenues totaled $1.1 billion, an increase of $55.8 million, or 5.5% when compared to $1.0 billion in 2020. Total equipment rental revenues increased 13.2% to $729.7 million compared to $644.4 million in 2020. Rental revenues increased 12.4% to $653.0 million compared to $581.1 million in 2020. Used equipment sales decreased 3.2% to $135.2 million from $139.8 million in the previous year. New equipment sales decreased 18.5% to $92.7 million compared to $113.7 million in the previous year. Parts sales declined modestly to $65.6 million from $65.9 million in 2020 while service revenues decreased 8.2% to $33.0 million from $36.0 million in the previous year.

Gross Profit

Gross profit increased 16.3%, or $58.3 million, to $415.4 million in 2021 from $357.1 million in 2020. Gross margin improved 360 basis points in 2021 to 39.1% compared to 35.5% for 2020. On a segment basis, gross margin on total equipment rentals was 43.3% compared to 40.0% in 2020. Rental margins were 48.4% compared to 44.4% in the previous year. On average, 2021 rental rates increased 0.9% compared to 2020. In 2021, time utilization (based on original equipment cost) was 69.7% compared to 62.9% a year ago. Gross margins on used equipment sales improved to 36.2% compared to 32.2% in the previous year. Gross margins on new equipment sales were 12.8% compared to 10.7% in the previous year. Gross margins on parts sales were 26.3% compared to 26.9% a year ago while gross margins on service revenues were 66.0% in 2021 compared to 68.0% in 2020.

Selling, General and Administrative Expenses

SG&A expenses for 2021 were $290.1 million compared to $265.9 million in 2020, an increase of $24.2 million, or 9.1%. The increase was primarily attributable to a $24.1 million increase in employee salaries, wages, incentive compensation, payroll taxes, and related employee benefits, a $3.1 million increase in facilities expense following the addition of 10 new branches, and a $1.3 million increase in utilities expense. These items were partially offset by a $2.1 million reduction in bad debt expense, and a $1.7 million decline in liability insurance costs. Expenses related to new branch expansion increased $13.2 million compared to a year ago. In 2021, SG&A expenses as a percentage of total revenues were 27.3% compared to 26.4% a year ago.

Income from Operations

Income from operations in 2021 totaled $132.3 million, or 12.5% of revenues, compared $43.4 million, or 4.3% of revenues in 2020. Adjusting for the previously noted non-recurring item relating to the impairment of goodwill, income from operations in 2020 would have been $99.1 million, or 9.8% of revenues.

Interest Expense

Interest expense in 2021 was $53.8 million, a 13.0% decline from $61.8 million in the previous year.

Net Income (Loss)

Net income in 2021 totaled $60.6 million, or $1.66 per diluted share, compared to a net loss in 2020 of $46.4 million, or $1.29 per diluted share. Adjusting for the previously noted non-recurring items, net income in 2020 would have been $31.5 million, or $0.87 per diluted share. The effective income tax rate in 2021 was 25.9% compared to a tax benefit in 2020 of 22.4%, or an effective tax rate of 22.2% when adjusted for the non-recurring items.

Adjusted EBITDA

Adjusted EBITDA for 2021 was $394.3 million compared to $359.4 million in 2020. Adjusted EBITDA in 2021 as a percentage of revenues was 37.1% compared to 35.7% in 2020.

Non-GAAP Financial Measures

This press release contains certain Non-GAAP measures (EBITDA, Adjusted EBITDA, Adjusted Income from Operations, Adjusted Net Income (Loss), Adjusted Net Income (Loss) per share and the disaggregation of equipment rental revenues and cost of sales numbers) detailed below. Please refer to our Current Report on Form 8-K filed with the Securities and Exchange Commission on February 24, 2022, for a description of these measures and of our use of these measures. These measures as calculated by the Company are not necessarily comparable to similarly titled measures reported by other companies. Additionally, these Non-GAAP measures are not a measurement of financial performance or liquidity under GAAP and should not be considered as alternatives to the Company's other financial information determined under GAAP.

Conference Call

The Company’s management will hold a conference call to discuss fourth quarter 2021 results today, February 24, 2022, at 10:00 a.m. (Eastern Time). To listen to the call, participants should dial 844-887-9400 approximately 10 minutes prior to the start of the call. A telephonic replay will become available after 1:00 p.m. (Eastern Time) on February 24, 2022, and will continue through March 3, 2022, by dialing 877-344-7529 and entering the confirmation code 2971254.

A live broadcast of the Company’s quarterly conference call will be available online at www.he-equipment.com on February 24, 2022, beginning at 10:00 a.m. (Eastern Time) and will remain available for 30 days. Related presentation materials will be posted to the “Investor Relations” section of the Company’s web site at www.he-equipment.com prior to the call. The presentation materials will be in Adobe Acrobat format.

About H&E Equipment Services, Inc.

Founded in 1961, H&E Equipment Services, Inc. is one of the largest rental equipment companies in the nation. The Company’s fleet is among the industry’s youngest and most versatile with a superior equipment mix comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines. H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast States, Southeast, and Mid-Atlantic regions.

Forward-Looking Statements

Statements contained in this press release that are not historical facts, including statements about H&E’s beliefs and expectations, are “forward-looking statements” within the meaning of the federal securities laws. Statements containing the words “may”, “could”, “would”, “should”, “believe”, “expect”, “anticipate”, “plan”, “estimate”, “target”, “project”, “intend”, “foresee” and similar expressions constitute forward-looking statements. Forward-looking statements involve known and unknown risks and uncertainties, which could cause actual results to differ materially from those contained in any forward-looking statement. Such factors include, but are not limited to, the following: (1) risks related to the impact of the COVID-19 global pandemic, such as the scope and duration of the outbreak, government actions and restrictive measures implemented in response to the pandemic, material delays and cancellations of construction or infrastructure projects, labor shortages, supply chain disruptions and other impacts to the business; (2) general economic conditions and construction and industrial activity in the markets where we operate in North America; (3) our ability to forecast trends in our business accurately, and the impact of economic downturns and economic uncertainty in the markets we serve (including as a result of current uncertainty due to COVID-19 and inflation); (4) trends in oil and natural gas could adversely affect the demand for our services and products; (5) the impact of conditions in the global credit and commodity markets (including as a result of current volatility and uncertainty in credit and commodity markets due to COVID-19) and their effect on construction spending and the economy in general; (6) relationships with equipment suppliers; (7) increased maintenance and repair costs as we age our fleet and decreases in our equipment’s residual value; (8) our indebtedness; (9) risks associated with the expansion of our business and any potential acquisitions we may make, including any related capital expenditures, or our inability to consummate such acquisitions; (10) our possible inability to integrate any businesses we acquire; (11) competitive pressures; (12) security breaches and other disruptions in our information technology systems; (13) adverse weather events or natural disasters; (14) compliance with laws and regulations, including those relating to environmental matters, corporate governance matters and tax matters, as well as any future changes to such laws and regulations; and (15) other factors discussed in our public filings, including the risk factors included in the Company’s most recent Annual Report on Form 10-K. Investors, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Except as required by applicable law, including the securities laws of the United States and the rules and regulations of the Securities and Exchange Commission, we are under no obligation to publicly update or revise any forward-looking statements after the date of this release, whether as a result of any new information, future events or otherwise. These statements are based on the current beliefs and assumptions of H&E’s management, which in turn are based on currently available information and important, underlying assumptions. Investors, potential investors, security holders and other readers are urged to consider the above-mentioned factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements.

H&E EQUIPMENT SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(Amounts in thousands, except per share amounts)

     

 

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

$

203,686

 

 

$

162,882

 

 

$

729,700

 

 

$

644,445

 

Used equipment sales

 

 

29,499

 

 

 

44,879

 

 

 

135,245

 

 

 

139,769

 

New equipment sales

 

 

22,516

 

 

 

33,751

 

 

 

92,677

 

 

 

113,708

 

Parts sales

 

 

15,684

 

 

 

15,684

 

 

 

65,623

 

 

 

65,881

 

Service revenues

 

 

8,340

 

 

 

8,744

 

 

 

33,034

 

 

 

35,989

 

Other

 

 

1,527

 

 

 

1,780

 

 

 

6,518

 

 

 

7,183

 

Total revenues

 

 

281,252

 

 

 

267,720

 

 

 

1,062,797

 

 

 

1,006,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

 

 

 

 

 

 

 

 

 

 

 

Rental depreciation

 

 

59,467

 

 

 

54,524

 

 

 

227,772

 

 

 

225,424

 

Rental expense

 

 

28,465

 

 

 

25,034

 

 

 

109,365

 

 

 

97,604

 

Rental other

 

 

21,540

 

 

 

17,026

 

 

 

76,934

 

 

 

63,909

 

 

 

 

109,472

 

 

 

96,584

 

 

 

414,071

 

 

 

386,937

 

Used equipment sales

 

 

17,897

 

 

 

30,680

 

 

 

86,323

 

 

 

94,799

 

New equipment sales

 

 

19,246

 

 

 

30,303

 

 

 

80,822

 

 

 

101,501

 

Parts sales

 

 

11,631

 

 

 

11,623

 

 

 

48,346

 

 

 

48,131

 

Service revenues

 

 

3,044

 

 

 

2,830

 

 

 

11,237

 

 

 

11,525

 

Other

 

 

1,739

 

 

 

1,583

 

 

 

6,635

 

 

 

7,019

 

Total cost of revenues

 

 

163,029

 

 

 

173,603

 

 

 

647,434

 

 

 

649,912

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

118,223

 

 

 

94,117

 

 

 

415,363

 

 

 

357,063

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, general, and administrative expenses

 

 

76,870

 

 

 

65,452

 

 

 

290,129

 

 

 

265,894

 

Merger and other

 

 

547

 

 

 

195

 

 

 

662

 

 

 

503

 

Gain on sales of property and equipment, net

 

 

(797

)

 

 

(1,592

)

 

 

(7,748

)

 

 

(8,410

)

Impairment of goodwill

 

 

 

 

 

 

 

 

 

 

 

55,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income from Operations

 

 

41,603

 

 

 

30,062

 

 

 

132,320

 

 

 

43,412

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(13,460

)

 

 

(15,301

)

 

 

(53,758

)

 

 

(61,790

)

Other income, net

 

 

1,136

 

 

 

928

 

 

 

3,162

 

 

 

3,184

 

Loss on early extinguishment of debt

 

 

 

 

 

(44,630

)

 

 

 

 

 

(44,630

)

Income (loss) from continuing operations before provision (benefit) for income taxes

 

 

29,279

 

 

 

(28,941

)

 

 

81,724

 

 

 

(59,824

)

Provision (benefit) for income taxes

 

 

7,549

 

 

 

(7,608

)

 

 

21,160

 

 

 

(13,428

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) from continuing operations

 

$

21,730

 

 

$

(21,333

)

 

$

60,564

 

 

$

(46,396

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Discontinued Operations:

 

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision (benefit) for income taxes

 

 

41,702

 

 

 

5,729

 

 

 

55,948

 

 

 

18,438

 

Provision (benefit) for income taxes

 

 

10,346

 

 

 

(987

)

 

 

13,972

 

 

 

4,709

 

Net income from discontinued operations

 

$

31,356

 

 

$

6,716

 

 

$

41,976

 

 

$

13,729

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

53,086

 

 

$

(14,617

)

 

$

102,540

 

 

$

(32,667

)

         

 H&E EQUIPMENT SERVICES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(Amounts in thousands, except per share amounts)

 

 

 

 

   

 

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

NET INCOME (LOSS) PER SHARE:

 

 

 

   

 

 

 

 

 

   

 

 

From continuing operations per common share:

 

 

 

   

 

 

 

 

 

   

 

 

Basic

 

$

0.60

   

$

(0.59

)

 

$

1.67

   

$

(1.29

)

Diluted

 

$

0.59

   

$

(0.59

)

 

$

1.66

   

$

(1.29

)

From discontinued operations per common share:

 

 

 

   

 

 

 

 

 

   

 

 

Basic

 

$

0.86

   

$

0.19

 

 

$

1.16

   

$

0.38

 

Diluted

 

$

0.86

   

$

0.19

 

 

$

1.15

   

$

0.38

 

Net income (loss) per common share:

 

 

 

   

 

 

 

 

 

   

 

 

Basic

 

$

1.46

   

$

(0.40

)

 

$

2.83

   

$

(0.91

)

Diluted

 

$

1.45

   

$

(0.40

)

 

$

2.81

   

$

(0.91

)

Weighted average common shares outstanding:

 

 

 

   

 

 

 

 

 

   

 

 

Basic

 

 

36,347

   

 

36,161

 

 

 

36,261

   

 

36,067

 

Diluted

 

 

36,544

   

 

36,161

 

 

 

36,451

   

 

36,067

 

Dividends declared per common share

 

$

0.275

   

$

0.275

 

 

$

1.10

   

$

1.10

 

             

H&E EQUIPMENT SERVICES, INC.

 

SELECTED BALANCE SHEET DATA (unaudited)

 

(Amounts in thousands)

 

 

 

 

 

December 31,

 

 

 

December 31,

 

 

 

2021

 

 

 

2020

 

Cash

$

357,296

 

 

$

310,882

 

Rental equipment, net

 

1,116,456

 

 

 

989,423

 

Assets held for sale

 

 

 

 

121,455

 

Total assets

 

2,080,447

 

 

 

1,980,484

 

Total debt (1)

 

1,250,000

 

 

 

1,250,305

 

Total liabilities

 

1,777,065

 

 

 

1,742,251

 

Stockholders’ equity

 

303,382

 

 

 

238,233

 

Total liabilities and stockholders’ equity

$

2,080,447

 

 

$

1,980,484

 

(1)

Total debt consists of the aggregate amounts on the senior unsecured notes and finance lease obligations.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2021

 

 

 

 

 

 

2021

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

Gross profit

 

$

118,223

 

 

$

 

 

$

118,223

 

Selling, general and administrative expenses

 

 

76,870

 

 

 

 

 

 

76,870

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

Gain on sale of property and equipment, net

 

 

(797

)

 

 

 

 

 

(797

)

Merger and other

 

 

547

 

 

 

 

 

 

547

 

Income from continuing operations

 

 

41,603

 

 

 

 

 

 

41,603

 

Interest expense

 

 

(13,460

)

 

 

 

 

 

(13,460

)

Other income, net

 

 

1,136

 

 

 

 

 

 

1,136

 

Income from continuing operations before provision for income taxes

 

 

29,279

 

 

 

 

 

 

29,279

 

Provision for income taxes

 

 

7,549

 

 

 

 

 

 

7,549

 

Net income from continuing operations

 

$

21,730

 

 

$

 

 

$

21,730

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations before provision (benefit) for income taxes

 

 

41,702

 

 

 

(42,072

)

(1) 

 

(370

)

Provision (benefit) for income taxes

 

 

10,346

 

 

 

(10,437

)

 

 

(91

)

Net income (loss) from discontinued operations

 

$

31,356

 

 

$

(31,635

)

 

$

(279

)

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

53,086

 

 

$

(31,635

)

 

$

21,451

 

(1)

Adjustment consists of gain on sale of discontinued operations.

 

 

 

Three Months Ended December 31,

 

 

 

2021

 

 

 

 

 

 

2021

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

NET INCOME (LOSS) PER SHARE (1)

 

 

 

 

 

 

 

 

 

 

Basic – Net income from continuing operations per common share:

 

$

0.60

 

 

$

 

 

$

0.60

 

Basic – Net income (loss) from discontinued operations per common share:

 

$

0.86

 

 

$

(0.87

)

 

$

(0.01

)

Basic – Net income per common share:

 

$

1.46

 

 

$

(0.87

)

 

$

0.59

 

Basic – Weighted average common shares outstanding:

 

 

36,347

 

 

 

36,347

 

 

 

36,347

 

 

 

 

 

 

 

 

 

 

 

 

Diluted – Net income from continuing operations per common share:

 

$

0.59

 

 

$

 

 

$

0.59

 

Diluted – Net income (loss) from discontinued operations per common share:

 

$

0.86

 

 

$

(0.87

)

 

$

(0.01

)

Diluted – Net income per common share:

 

$

1.45

 

 

$

(0.87

)

 

$

0.59

 

Diluted – Weighted average common shares outstanding:

 

 

36,544

 

 

 

36,544

 

 

 

36,544

 

(1)

Because of the method used in calculating per share data, the summation of the above per share data may not necessarily total to the as adjusted per share data.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

 

 

2021

 

 

 

 

 

 

2021

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

Gross profit

 

$

415,363

 

 

$

 

 

$

415,363

 

Selling, general and administrative expenses

 

 

290,129

 

 

 

 

 

 

290,129

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

Gain on sale of property and equipment, net

 

 

(7,748

)

 

 

 

 

 

(7,748

)

Merger and other

 

 

662

 

 

 

 

 

 

662

 

Income from continuing operations

 

 

132,320

 

 

 

 

 

 

132,320

 

Interest expense

 

 

(53,758

)

 

 

 

 

 

(53,758

)

Other income, net

 

 

3,162

 

 

 

 

 

 

3,162

 

Income from continuing operations before provision for income taxes

 

 

81,724

 

 

 

 

 

 

81,724

 

Provision for income taxes

 

 

21,160

 

 

 

 

 

 

21,160

 

Net income from continuing operations

 

$

60,564

 

 

$

 

 

$

60,564

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision for income taxes

 

 

55,948

 

 

 

(42,072

)

(1) 

 

13,876

 

Provision for income taxes

 

 

13,972

 

 

 

(10,437

)

 

 

3,535

 

Net income from discontinued operations

 

$

41,976

 

 

$

(31,635

)

 

$

10,341

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

102,540

 

 

$

(31,635

)

 

$

70,905

 

(1)

Adjustment consists of gain on sale of discontinued operations.

 

 

 

Twelve Months Ended December 31,

 

 

 

 

2021

 

 

 

 

 

 

2021

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

NET INCOME PER SHARE (1)

 

 

 

 

 

 

 

 

 

 

 

Basic – Net income from continuing operations per common share:

 

$

1.67

 

 

$

 

 

$

1.67

 

Basic – Net income from discontinued operations per common share:

 

$

1.16

 

 

$

(0.87

)

 

$

0.29

 

Basic – Net income per common share:

 

$

2.83

 

 

$

(0.87

)

 

$

1.96

 

Basic – Weighted average common shares outstanding:

 

 

36,261

 

 

 

36,261

 

 

 

36,261

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted – Net income from continuing operations per common share:

 

$

1.66

 

 

$

 

 

$

1.66

 

Diluted – Net income from discontinued operations per common share:

 

$

1.15

 

 

$

(0.87

)

 

$

0.28

 

Diluted – Net income per common share:

 

$

2.81

 

 

$

(0.87

)

 

$

1.95

 

Diluted – Weighted average common shares outstanding:

 

 

36,451

 

 

 

36,451

 

 

 

36,451

 

(1)

Because of the method used in calculating per share data, the summation of the above per share data may not necessarily total to the as adjusted per share data.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

Three Months Ended December 31,

 

 

 

2020

 

 

 

 

 

 

2020

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

Gross profit

 

$

94,117

 

 

$

 

 

$

94,117

 

Selling, general and administrative expenses

 

 

65,452

 

 

 

 

 

 

65,452

 

Impairment of goodwill

 

 

 

 

 

 

 

 

 

Gain on sale of property and equipment, net

 

 

(1,592

)

 

 

 

 

 

(1,592

)

Merger and other

 

 

195

 

 

 

 

 

 

195

 

Income from continuing operations

 

 

30,062

 

 

 

 

 

 

30,062

 

Interest expense

 

 

(15,301

)

 

 

 

 

 

(15,301

)

Loss on early extinguishment of debt

 

 

(44,630

)

 

 

44,630

 

 

 

 

Other income, net

 

 

928

 

 

 

 

 

 

928

 

Income (loss) from continuing operations before provision (benefit) for income taxes

 

 

(28,941

)

 

 

44,630

 

 

 

15,689

 

Provision (benefit) for income taxes

 

 

(7,608

)

 

 

11,016

 

 

 

3,408

 

Net income (loss) from continuing operations

 

$

(21,333

)

 

$

33,614

 

 

$

12,281

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision (benefit) for income taxes

 

 

5,729

 

 

 

 

 

 

5,729

 

Provision (benefit) for income taxes

 

 

(987

)

 

 

2,364

 

 

 

1,377

 

Net income from discontinued operations

 

$

6,716

 

 

$

(2,364

)

 

$

4,352

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(14,617

)

 

$

31,250

 

 

$

16,633

 

 

 

 

Three Months Ended December 31,

 

 

 

 

2020

 

 

 

 

 

 

2020

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

NET INCOME (LOSS) PER SHARE (1)

 

 

 

 

 

 

 

 

 

 

Basic – Net income (loss) from continuing operations per common share:

 

$

(0.59

)

 

$

0.93

 

 

$

0.34

 

Basic – Net income from discontinued operations per common share:

 

$

0.19

 

 

$

(0.07

)

 

$

0.12

 

Basic – Net income (loss) per common share:

 

$

(0.40

)

 

$

0.86

 

 

$

0.46

 

Basic – Weighted average common shares outstanding:

 

 

36,161

 

 

 

36,161

 

 

 

36,161

 

 

 

 

 

 

 

 

 

 

 

 

Diluted – Net income (loss) from continuing operations per common share:

 

$

(0.59

)

 

$

0.93

 

 

$

0.34

 

Diluted – Net income from discontinued operations per common share:

 

$

0.19

 

 

$

(0.07

)

 

$

0.12

 

Diluted – Net income (loss) per common share:

 

$

(0.40

)

 

$

0.86

 

 

$

0.46

 

Diluted – Weighted average common shares outstanding:

 

 

36,161

 

 

 

36,300

 

 

 

36,300

 

(1)

Because of the method used in calculating per share data, the summation of the above per share data may not necessarily total to the as adjusted per share data.

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands, except per share amounts)

 

 

 

 

 

 

 

Twelve Months Ended December 31,

 

 

 

2020

 

 

 

 

 

 

2020

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

Gross profit

 

$

357,063

 

 

$

 

 

$

357,063

 

Selling, general and administrative expenses

 

 

265,894

 

 

 

 

 

 

265,894

 

Impairment of goodwill

 

 

55,664

 

 

 

(55,664

)

 

 

 

Gain on sale of property and equipment, net

 

 

(8,410

)

 

 

 

 

 

(8,410

)

Merger and other

 

 

503

 

 

 

 

 

 

503

 

Income from continuing operations

 

 

43,412

 

 

 

55,664

 

 

 

99,076

 

Interest expense

 

 

(61,790

)

 

 

 

 

 

(61,790

)

Loss on early extinguishment of debt

 

 

(44,630

)

 

 

44,630

 

 

 

 

Other income, net

 

 

3,184

 

 

 

 

 

 

3,184

 

Income (loss) from continuing operations before provision (benefit) for income taxes

 

 

(59,824

)

 

 

100,294

 

 

 

40,470

 

Provision (benefit) for income taxes

 

 

(13,428

)

 

 

22,421

 

 

 

8,993

 

Net income (loss) from continuing operations

 

$

(46,396

)

 

$

77,873

 

 

$

31,477

 

 

 

 

 

 

 

 

 

 

 

Income from discontinued operations before provision for income taxes

 

 

18,438

 

 

 

6,330

(1)

 

 

24,768

 

Provision for income taxes

 

 

4,709

 

 

 

1,388

 

 

 

6,097

 

Net income from discontinued operations

 

$

13,729

 

 

$

4,942

 

 

$

18,671

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

(32,667

)

 

$

82,815

 

 

$

50,148

 

(1)

Adjustment consists of impairment of goodwill from discontinued operations.

 

 

 

Twelve Months Ended December 31,

 

 

 

 

2020

 

 

 

 

 

 

 

2020

 

 

 

 

As Reported

 

 

 

Adjustment

 

 

 

As Adjusted

 

NET INCOME (LOSS) PER SHARE (1)

 

 

 

 

 

 

 

 

 

 

 

Basic – Net income (loss) from continuing operations per common share:

 

$

(1.29

)

 

$

2.16

 

 

$

0.87

 

Basic – Net income from discontinued operations per common share:

 

$

0.38

 

 

$

0.14

 

 

$

0.52

 

Basic – Net income (loss) per common share:

 

$

(0.91

)

 

$

2.30

 

 

$

1.39

 

Basic – Weighted average common shares outstanding:

 

 

36,067

 

 

 

36,067

 

 

 

36,067

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted – Net income (loss) from continuing operations per common share:

 

$

(1.29

)

 

$

2.15

 

 

$

0.87

 

Diluted – Net income from discontinued operations per common share:

 

$

0.38

 

 

$

0.14

 

 

$

0.52

 

Diluted – Net income (loss) per common share:

 

$

(0.91

)

 

$

2.29

 

 

$

1.39

 

Diluted – Weighted average common shares outstanding:

 

 

36,067

 

 

 

36,185

 

 

 

36,185

 

(1)

Because of the method used in calculating per share data, the summation of the above per share data may not necessarily total to the as adjusted per share data.

 H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Income (loss)

 

$

53,086

 

 

$

(14,617

)

 

 

$

102,540

 

 

$

(32,667

)

Net income from discontinued operations

 

 

31,356

 

 

 

6,716

 

 

 

 

41,976

 

 

 

13,729

 

Net income (loss) from continuing operations

 

 

21,730

 

 

 

(21,333

)

 

 

 

60,564

 

 

 

(46,396

)

Interest Expense

 

 

13,460

 

 

 

15,301

 

 

 

 

53,758

 

 

 

61,790

 

Provision (benefit) for income taxes

 

 

7,549

 

 

 

(7,608

)

 

 

 

21,160

 

 

 

(13,428

)

Depreciation

 

 

66,153

 

 

 

61,087

 

 

 

 

254,158

 

 

 

252,681

 

Amortization of intangibles

 

 

992

 

 

 

991

 

 

 

 

3,970

 

 

 

3,987

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from continuing operations

 

$

109,884

 

 

$

48,438

 

 

 

$

393,610

 

 

$

258,634

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Merger and other

 

 

547

 

 

 

195

 

 

 

 

662

 

 

 

503

 

Loss on early extinguishment of debt

 

 

-

 

 

 

44,630

 

 

 

 

-

 

 

 

44,630

 

Impairment of goodwill

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

55,664

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA from continuing operations

 

$

110,431

 

 

$

93,263

 

 

 

$

394,272

 

 

$

359,431

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income from discontinued operations

 

$

31,356

 

 

$

6,716

 

 

 

$

41,976

 

 

$

13,729

 

Provision (benefit) for income taxes

 

 

10,346

 

 

 

(987

)

 

 

 

13,972

 

 

 

4,709

 

Depreciation

 

 

 

 

 

2,609

 

 

 

 

4,803

 

 

 

10,649

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EBITDA from discontinued operations

 

$

41,702

 

 

$

8,338

 

 

 

$

60,751

 

 

$

29,087

 

Merger and other

 

 

370

 

 

 

-

 

 

 

 

2,065

 

 

 

-

 

Gain from sale of discontinued operations

 

 

(42,072

)

 

 

-

 

 

 

 

(42,072

)

 

 

-

 

Impairment of goodwill

 

 

-

 

 

 

-

 

 

 

 

-

 

 

 

6,330

 

Adjusted EBITDA from discontinued operations

 

$

-

 

 

$

8,338

 

 

 

$

20,744

 

 

$

35,417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

110,431

 

 

$

101,601

 

 

 

$

415,016

 

 

$

394,848 

 

H&E EQUIPMENT SERVICES, INC.

UNAUDITED RECONCILIATION OF NON-GAAP FINANCIAL MEASURES

(Amounts in thousands)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

December 31,

 

 

Twelve Months Ended

December 31,

 

 

 

2021

 

 

 

2020

 

 

 

2021

 

 

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals (1)

 

$

181,993

 

 

$

145,961

 

 

$

653,004

 

 

$

581,144

 

Rentals other

 

 

21,693

 

 

 

16,921

 

 

 

76,696

 

 

 

63,301

 

Total equipment rentals

 

 

203,686

 

 

 

162,882

 

 

 

729,700

 

 

 

644,445

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL COST OF SALES

 

 

 

 

 

 

 

 

 

 

 

 

Rental depreciation

 

 

59,467

 

 

 

54,524

 

 

 

227,772

 

 

 

225,424

 

Rental expense

 

 

28,465

 

 

 

25,034

 

 

 

109,365

 

 

 

97,604

 

Rental other

 

 

21,540

 

 

 

17,026

 

 

 

76,934

 

 

 

63,909

 

Total rental cost of sales

 

 

109,472

 

 

 

96,584

 

 

 

414,071

 

 

 

386,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS PROFIT (LOSS)

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

 

94,061

 

 

 

66,403

 

 

 

315,867

 

 

 

258,116

 

Rentals other

 

 

153

 

 

 

(105

)

 

 

(238

)

 

 

(608

)

Total rental revenues gross profit

 

$

94,214

 

 

$

66,298

 

 

$

315,629

 

 

$

257,508

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RENTAL REVENUES GROSS MARGIN

 

 

 

 

 

 

 

 

 

 

 

 

Equipment rentals

 

 

51.7

%

 

 

45.5

%

 

 

48.4

%

 

 

44.4

%

Rentals other

 

 

0.7

%

 

 

-0.6

%

 

 

-0.3

%

 

 

-1.0

%

Total rental revenues gross margin

 

 

46.3

%

 

 

40.7

%

 

 

43.3

%

 

 

40.0

%

(1)

Pursuant to SEC Regulation S-X, our equipment rental revenues are aggregated and presented in our unaudited consolidated statements of operations in this press release as a single line item, “Equipment Rentals.” The above table disaggregates our equipment rental revenues for discussion and analysis purposes only.

 

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