Herc Rentals reports 29.2 percent increase in third quarter rental revenue

Oct. 24, 2021

Herc Rentals, Bonita Springs, Fla., reported a 29.2 percent increase in third quarter rental revenue to reach $519.6 million. Total revenues increased 20.5 percent to $550.4 million.

The third quarter results also were up 13.1 percent over the same time period in 2019, driven by the performance of the company’s core business as well as a growing market share from specialty rental businesses.

“This is an exciting time for team Herc. We have the appetite and desire to achieve even greater success. Our long-term strategy is driving results and we are positioned for a record year in 2021,” said Larry Silber, Herc Rentals president and CEO.

“Our industry-leading rate management delivered strong results in a favorable operating environment which benefited from tight equipment supply and steady rental demand,” Silber said.

In a call with financial analysts on Oct. 21, Silber added that “2021 has turned out to be a pivotal year for the equipment rental industry. Tight supplies of equipment and steady demand have created an optimal environment for us. We increased dollar utilization year-over-year by 840 basis points to 46 percent in the third quarter, reflecting improved volume, mix, and rates.”

“Our focus on the top MSAs (metropolitan statistical areas) in North America and filling out our urban density in select locations is driving both our greenfield and acquisition targets. Since December 2020, we completed five acquisitions for a cumulative total purchase price of $280 million and announced our sixth acquisition Rapid Equipment Rental of Toronto earlier this month. As of today, we are now operating approximately 295 locations across the United States and Canada in 39 states and five provinces. Were excited about the momentum we are generating and in developing our M&A (mergers and acquisitions) pipeline,” Silber said.

Also, of note in the third quarter, Herc Rentals reported an improvement in pricing of 2.8 percent and a company record dollar utilization of 46 percent, up from 37.6 percent last year.

In addition, the company confirmed its full year 2021 guidance range of $870 to $890 million in adjusted earnings before income tax, depreciation and amortization (EBITDA) and of $1.05 to $1.15 billion in 2022. Net rental capital expenditures are expected to total $500 to $550 million in 2021 and $820 million to $1.12 billion in 2022. Total fleet was $4.1 billion at the end of the third quarter, about 9.4 percent higher than the original equipment costs at the end of the third quarter last year.

The company’s ProSolutions business increased revenue by about 30 percent in the third quarter as Herc Rentals continues to expand its market share in this area.

“Our focus on the power generation, climate control and remediation needs of our customers has contributed to the double-digit revenue growth in ProSolutions over the last four years. The strategic investments we made to diversify our customer base and industry verticals provided a solid foundation for growth as we successfully built upon our urban market strategy and deepened and widened our market segments throughout North America,” said Aaron Birnbaum, Herc Rentals senior vice president and chief operating officer.

Birnbaum also emphasized the company’s intention to be “the employer of choice” in the industry by offering competitive salaries and benefits to enhance retention and attract talent. “We also intend to be the acquirer of choice, and weve been busy integrating our new team Herc members and focusing on Herc career development, job opportunities and training. With the spate of climate-related events this year, we are also supporting the Herc families impacted by Hurricane Ida. Our team Herc members contribute donations and the company matches their contributions to assist our team members in need. Our employee resource groups, Women in Action and the Veterans Employee Resource Group, also are active in offering career-related programs, networking opportunities and support,” Birnbaum said.

In the third quarter, Birnbaum said all branch operations achieved at least 98 percent of days as “perfect” pertaining to safety. A “perfect” day is one without any Occupational Safety and Health Administration (OSHA) reportable incidents, no at-fault motor vehicle accidents, and no Department of Transportation (DOT) violations.

“Were always striving for 100 percent perfect days and our commitment to safety means continuous focus through communications and training. It also means supplying the team with the equipment that will help them perform efficiently and safely, particularly in their driving and daily equipment servicing and maintenance activities at all of our branches. Our rental days are best when they are done safely seven days a week,” he said.

Don’t miss the latest news from the equipment and event rental industry. Click here to subscribe to Rental Pulse and Rental Management magazine.

An official publication of the American Rental Association.
Produced by Rental Management Group. Copyright © 2021 Rental Pulse all rights reserved