H&E Equipment Services Inc (HEES) Reports Q3 2023 Earnings: Revenue and Net Income Rise
Revenues for Q3 2023 increased by 23.6% to $400.7 million compared to $324.3 million in Q3 2022.
Net income for Q3 2023 was $48.9 million, up from $38.4 million in the same period last year.
Adjusted EBITDA rose by 36.2% to $189.1 million compared to $138.9 million in Q3 2022.
Total equipment rental revenues were $315.8 million, an increase of 24.5% compared to $253.6 million in Q3 2022.
On October 26, 2023, H&E Equipment Services Inc (NASDAQ:HEES) released its financial results for the third quarter ended September 30, 2023. The company reported robust industry conditions, strong fleet growth, and further branch expansion contributing to record adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Financial Performance
HEES reported a 23.6% increase in revenues, reaching $400.7 million compared to $324.3 million in the same period last year. Net income was $48.9 million, which included a pre-tax $5.7 million non-cash goodwill impairment charge. Excluding the impairment charge, net income was $53.0 million compared to $38.4 million in Q3 2022. The effective income tax rate was 26.1%, or 26.2% excluding the impairment charge, compared to 25.2% in Q3 2022.
Key Financial Details
Total equipment rental revenues were $315.8 million, an increase of $62.2 million, or 24.5%, compared to $253.6 million in Q3 2022. Rental revenues were $280.3 million, an increase of $56.1 million, or 25.0%, compared to $224.1 million. Used equipment sales increased 159.6% to $52.7 million compared to $20.3 million.
Gross margin improved to 47.0% compared to 46.8%. Total equipment rental gross margins were 47.4% compared to 50.5%. Rental gross margins were 53.3% compared to 55.6%. Adjusted EBITDA margins improved to 47.2% of revenues compared to 42.8%.
Company's Outlook
HEES believes a robust business environment will persist through the final quarter of 2023 and into 2024. The company expects to benefit from an expansion in project opportunities, with mega projects contributing to enhanced U.S. construction activity. The company also anticipates further growth in rental penetration, modest rental rate improvement, and favorable utilization trends in this attractive business environment.
About H&E Equipment Services Inc (NASDAQ:HEES)
Founded in 1961, H&E Equipment Services, Inc. is one of the largest rental equipment companies in the nation. The Companys fleet is among the industrys 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, Southeast, Midwest, and Mid-Atlantic regions.
Explore the complete 8-K earnings release (here) from H&E Equipment Services Inc for further details.
This article first appeared on GuruFocus.
