In This Article:
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Equipment Rental Revenue Growth: Approximately 5% increase in the quarter, excluding the Cinelease business.
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Rental Revenue: Increased by 2.8% including Cinelease.
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Adjusted EBITDA: Flat at $339 million.
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Net Income: Adjusted net income was $37 million, excluding $74 million of H&E transaction costs.
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Net Fleet CapEx Plan: Roughly 35% lower year-over-year at the midpoint of guidance.
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Fleet Composition: Total fleet was $6.9 billion as of March 31, 2025, with specialty fleet representing about 24% of the total.
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Free Cash Flow: Generated $49 million in the first quarter.
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Leverage Ratio: Current leverage ratio is 2.5x.
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ROIC: Trailing 12-month ROIC for the core business declined 110 basis points to 9.8%.
Release Date: April 22, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Herc Holdings Inc (NYSE:HRI) reported a 5% growth in equipment rental revenue for the quarter, excluding the Cinelease business.
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The company successfully executed a merger agreement to acquire H&E Equipment Services, expanding its scale and geographic coverage.
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Herc Holdings Inc (NYSE:HRI) is focusing on increasing specialty fleet CapEx to capture share of wallet opportunities and support mega projects.
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The company maintains a strong commitment to safety, achieving a 96% perfect day rate across its operations.
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Herc Holdings Inc (NYSE:HRI) has a diversified business model, reducing reliance on a single industry or customer, which enhances resilience to economic cycles.
Negative Points
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The company faced challenges in the local market due to prolonged elevated interest rates, impacting local account growth.
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Unusually cold weather in the southern states led to temporary branch closures, affecting daily and weekly local rentals.
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Herc Holdings Inc (NYSE:HRI) recorded a net loss in the first quarter due to $74 million of H&E transaction costs.
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The local market slowdown and inefficiencies associated with new acquisitions and greenfields impacted the company's ROIC.
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The company is pausing other M&A initiatives to focus on integrating the H&E acquisition, which may limit growth opportunities in the short term.
Q & A Highlights
Q: Can you comment on the dollar utilization recovery in April and its implications for the full-year guidance? A: Mark Humphrey, CFO, stated that dollar utilization improved in March to levels comparable to the previous year, which has continued into April. This suggests a normalized cadence of dollar utilization throughout the quarters, supporting the full-year guidance.