H&E Equipment Services, Inc. (HEES) Bundle
A Brief History of H&E Equipment Services, Inc.
H&E Equipment Services, Inc. (HEES) has established itself as a prominent player in the equipment rental and sales industry. As of 2024, the company operates an extensive fleet and has expanded its market presence significantly through strategic acquisitions.
Financial Performance Overview
For the nine months ended September 30, 2024, H&E Equipment reported total revenues of approximately $1.1 billion, reflecting an increase of $49.1 million or 4.5% compared to the same period in 2023. The breakdown of revenue sources is as follows:
| Revenue Source | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|
| Equipment Rentals | $933,900 | $869,278 | $64,622 | 7.4% |
| Sales of Rental Equipment | $110,842 | $124,476 | ($13,634) | (11.0%) |
| Sales of New Equipment | $35,136 | $29,308 | $5,828 | 19.9% |
| Parts, Service, and Other | $52,623 | $60,348 | ($7,725) | (12.8%) |
Gross Profit Analysis
H&E Equipment's total gross profit for the nine months ended September 30, 2024, was $507.6 million, an increase of $9.5 million or 1.9% year-over-year. The gross profit margin was approximately 44.8%, a slight decrease from 46.0% in 2023.
| Gross Profit Source | 2024 Gross Profit (in thousands) | 2023 Gross Profit (in thousands) | Change (in thousands) | Percentage Change |
|---|---|---|---|---|
| Equipment Rentals | $418,000 | $400,582 | $17,418 | 4.3% |
| Sales of Rental Equipment | $68,836 | $73,080 | ($4,244) | (5.8%) |
| Sales of New Equipment | $6,359 | $4,030 | $2,329 | 57.8% |
| Parts, Service, and Other | $14,416 | $20,430 | ($6,014) | (29.4%) |
Acquisitions and Expansion
In 2024, H&E Equipment Services made significant strides in expanding its operations through acquisitions. Notably, the company completed the acquisition of Precision Rentals, which increased its footprint in Arizona and Colorado. The total cash consideration for this acquisition was approximately $124.0 million.
| Acquisition Details | Amount (in thousands) |
|---|---|
| Cash Consideration for Precision Rentals | $124,000 |
| Net Identifiable Assets Acquired | $102,294 |
| Goodwill from Acquisition | $18,187 |
Cash Flow and Liquidity
For the nine months ended September 30, 2024, H&E Equipment reported net cash provided by operating activities of $366.2 million, compared to $276.5 million for the same period in 2023. The increase in cash flow was attributed to improved operational efficiency despite fluctuations in working capital.
As of September 30, 2024, the company had $11.1 million in cash and liquidity position enhanced by available borrowings under its credit facility, totaling $472.4 million.
Income and Taxation
H&E Equipment reported a net income of $90.2 million for the nine months ended September 30, 2024, a decrease from $115.8 million in 2023. The effective income tax rate for this period was 27.6%, slightly higher than the 26.2% in the previous year.
| Income Statement Summary | 2024 Amount (in thousands) | 2023 Amount (in thousands) |
|---|---|---|
| Net Income | $90,218 | $115,769 |
| Income Tax Expense | $34,390 | $41,002 |
A Who Owns H&E Equipment Services, Inc. (HEES)
Ownership Structure
As of 2024, H&E Equipment Services, Inc. (HEES) has a diverse ownership structure, comprising institutional investors, individual shareholders, and company executives. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Ownership Percentage |
|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 15.6% |
| Institutional Investor | BlackRock, Inc. | 10.2% |
| Institutional Investor | State Street Corporation | 9.3% |
| Individual | John A. Hargrove (CEO) | 2.4% |
| Individual | Executive Officers and Directors (combined) | 3.1% |
| Other Shareholders | Retail Investors | 59.4% |
Market Capitalization
As of early 2024, H&E Equipment Services, Inc. has a market capitalization of approximately $1.2 billion. This reflects the company's performance in the rental equipment sector and its growth trajectory over the past few years.
Stock Performance
The stock performance of HEES has shown a steady increase, with a year-to-date price appreciation of approximately 12%. The stock was trading at around $29.50 per share at the beginning of 2024 and has reached approximately $33.00 per share by March 2024.
Recent Financial Performance
For the nine months ended September 30, 2024, H&E Equipment Services reported total revenues of $1.132 billion, an increase of 4.5% compared to the same period in 2023. The breakdown of revenues is as follows:
| Revenue Source | 2024 (in millions) | 2023 (in millions) | Increase/Decrease (%) |
|---|---|---|---|
| Equipment Rentals | $933.9 | $869.3 | 7.4% |
| Sales of Rental Equipment | $110.8 | $124.5 | (11.0%) |
| Sales of New Equipment | $35.1 | $29.3 | 19.9% |
| Parts, Service, and Other | $52.6 | $60.3 | (12.8%) |
Dividends
H&E Equipment Services declared a cash dividend of $0.275 per share for the year 2024, consistent with the previous year, reflecting the company's commitment to returning value to its shareholders.
Executive Compensation
In 2024, the total compensation for CEO John A. Hargrove was reported at approximately $1.4 million, which includes base salary, bonuses, and stock options.
Debt and Liquidity Position
As of September 30, 2024, H&E Equipment Services had total liabilities of approximately $1.3 billion, with a debt-to-equity ratio of 2.1. The company has a senior secured credit facility of $750 million, of which $276.3 million was drawn at the end of the third quarter of 2024.
H&E Equipment Services, Inc. (HEES) Mission Statement
Mission Statement Overview
The mission of H&E Equipment Services, Inc. is to provide superior equipment rental and sales services while delivering exceptional customer service and support. H&E aims to be the partner of choice in the construction and industrial equipment rental industry by offering a diverse fleet of high-quality equipment and a commitment to safety and efficiency.
Core Values
- Customer Commitment: H&E Equipment Services prioritizes customer satisfaction and aims to meet the unique needs of each client.
- Integrity: The company operates with transparency and honesty in all transactions.
- Safety: H&E is dedicated to maintaining a safe work environment for employees and customers alike.
- Excellence: The company strives for excellence in service delivery and operational efficiency.
Financial Performance Metrics
As of September 30, 2024, H&E Equipment Services reported strong financial results that reflect its operational effectiveness and market presence.
| Financial Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $384.9 million | $400.7 million | ($15.8 million) | (4.0%) |
| Gross Profit | $171.5 million | $188.4 million | ($16.9 million) | (9.0%) |
| Net Income | $31.1 million | $48.9 million | ($17.8 million) | (36.4%) |
Revenue Breakdown
The company's revenue streams are diversified across equipment rentals and sales, demonstrating resilience in various market conditions.
| Revenue Source | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Equipment Rentals | $326.2 million | $315.8 million | $10.4 million | 3.3% |
| Sales of Rental Equipment | $27.8 million | $52.7 million | ($24.9 million) | (47.3%) |
| Sales of New Equipment | $14.1 million | $12.6 million | $1.5 million | 11.2% |
Operational Highlights
H&E Equipment Services has continued to expand its fleet and improve its service offerings, contributing to its market competitiveness.
| Operational Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Average Rental Rates | $X (specific value not provided) | $Y (specific value not provided) | 1.5% |
| Fleet Size (Original Cost) | $220.1 million | $203.8 million | 8.1% |
Market Position
H&E Equipment Services has established itself as a leading provider in the equipment rental sector, leveraging its extensive fleet and customer-centric approach.
| Market Metric | 2024 | 2023 | Change (%) |
|---|---|---|---|
| Market Share Estimate | X% (specific value not provided) | Y% (specific value not provided) | Z% (specific value not provided) |
| Customer Satisfaction Score | X (specific value not provided) | Y (specific value not provided) | Z (specific value not provided) |
How H&E Equipment Services, Inc. (HEES) Works
Business Model
H&E Equipment Services, Inc. (HEES) operates primarily in the equipment rental industry, focusing on a diverse range of equipment including aerial work platforms, earthmoving equipment, and material handling equipment. The company generates revenue through:
- Rental of equipment
- Sales of rental equipment
- Sales of new equipment
- Parts, service, and other ancillary services
Financial Performance
As of September 30, 2024, H&E Equipment Services reported total revenues of $1.1 billion for the nine months ended, representing a 4.5% increase compared to $1.1 billion for the same period in 2023. The breakdown of revenues is as follows:
| Revenue Source | 2024 (in thousands) | 2023 (in thousands) | Increase (Decrease) | Percentage Change |
|---|---|---|---|---|
| Equipment Rentals | $933,900 | $869,278 | $64,622 | 7.4% |
| Sales of Rental Equipment | $110,842 | $124,476 | ($13,634) | (11.0%) |
| Sales of New Equipment | $35,136 | $29,308 | $5,828 | 19.9% |
| Parts, Service, and Other | $52,623 | $60,348 | ($7,725) | (12.8%) |
| Total Revenues | $1,132,501 | $1,083,410 | $49,091 | 4.5% |
Gross Profit Analysis
H&E Equipment Services reported a total gross profit of $507.6 million for the nine months ended September 30, 2024, an increase of 1.9% compared to $498.1 million in the same period in 2023. The gross profit breakdown is as follows:
| Gross Profit Source | 2024 (in thousands) | 2023 (in thousands) | Increase (Decrease) | Percentage Change |
|---|---|---|---|---|
| Equipment Rentals | $417,988 | $400,582 | $17,406 | 4.3% |
| Sales of Rental Equipment | $68,836 | $73,080 | ($4,244) | (5.8%) |
| Sales of New Equipment | $6,359 | $4,030 | $2,329 | 57.8% |
| Parts, Service, and Other | $14,416 | $20,430 | ($6,014) | (29.4%) |
| Total Gross Profit | $507,599 | $498,122 | $9,477 | 1.9% |
Rental Operations
For the nine months ended September 30, 2024, rental revenues amounted to $933.9 million, representing a 7.4% increase from the previous year. Average rental rates increased by 1.5%, and the company reported a rental equipment dollar utilization of 38.3%, down from 40.3% in 2023.
Cost Structure
The total cost of revenues for H&E Equipment Services was $624.9 million for the nine months ended September 30, 2024. Key components of the cost structure include:
- Rental depreciation: $278.99 million
- Rental expenses: $98.22 million
- Cost of sales for rental equipment: $42.94 million
- Cost of sales for new equipment: $27.52 million
- Cost of parts, service, and other: $38.96 million
Operating Expenses
For the nine months ended September 30, 2024, selling, general, and administrative (SG&A) expenses totaled $338.6 million, a 13.3% increase from $298.8 million in 2023. Major contributors to this increase included:
- Employee-related expenses: $16.3 million
- Facility expenses: $7.4 million
- Depreciation and amortization: $7.2 million
- Liability insurance: $3.0 million
Net Income
H&E Equipment Services reported a net income of $90.2 million for the nine months ended September 30, 2024, compared to $115.8 million for the same period in 2023. The effective income tax rate for the nine months was 27.6% compared to 26.2% in the previous year.
Debt and Liquidity
As of September 30, 2024, H&E Equipment Services had $276.3 million outstanding under its $750 million Credit Facility, with a weighted average interest rate of approximately 7.2%. The company maintained liquidity with cash balances of $11.1 million and available borrowings of approximately $461.3 million.
Share Performance
The basic net income per share for the nine months ended September 30, 2024, was $2.49, down from $3.21 for the same period in 2023. The diluted net income per share was $2.47, compared to $3.19 in the previous year.
How H&E Equipment Services, Inc. (HEES) Makes Money
Revenue Streams
H&E Equipment Services, Inc. generates its revenues from four primary business activities:
- Equipment Rentals
- Sales of Rental Equipment
- Sales of New Equipment
- Parts, Service, and Other Revenues
Equipment Rentals
Equipment rentals are the largest source of revenue for H&E Equipment Services. For the nine months ended September 30, 2024, rental revenues totaled $933.9 million, an increase of $64.6 million, or 7.4%, compared to the same period in 2023. The breakdown of rental revenues is as follows:
| Category | 2024 Revenue (in thousands) | 2023 Revenue (in thousands) | Increase/Decrease (in thousands) | Percentage Change |
|---|---|---|---|---|
| Owned Equipment Rentals | $825,308 | $771,056 | $54,252 | 7.0% |
| Other Rentals | $108,592 | $98,222 | $10,370 | 10.6% |
| Total Equipment Rentals | $933,900 | $869,278 | $64,622 | 7.4% |
The gross profit from equipment rentals for the nine months ended September 30, 2024, was $417.988 million, reflecting an increase of $17.406 million, or 4.3%, compared to the previous year. The gross profit margin for equipment rentals was 44.8%, a slight decrease from 46.0% in 2023.
Sales of Rental Equipment
H&E Equipment Services also sells equipment from its rental fleet. For the nine months ended September 30, 2024, the revenue from sales of rental equipment was $110.842 million, down from $124.476 million in 2023, representing a decrease of $13.634 million, or 11.0%. The gross profit from these sales was $68.836 million, which is a drop of $4.244 million, or 5.8%, compared to the prior year.
Sales of New Equipment
The company has seen growth in its sales of new equipment, which increased to $35.136 million for the nine months ended September 30, 2024, compared to $29.308 million in 2023, marking an increase of $5.828 million, or 19.9%. The gross profit from sales of new equipment was $6.359 million, up from $4.030 million, reflecting a 57.8% increase.
Parts, Service, and Other Revenues
Parts, service, and other revenues for the nine months ended September 30, 2024, amounted to $52.623 million, down from $60.348 million in 2023, a decrease of $7.725 million, or 12.8%. The gross profit from these activities was $14.416 million, reflecting a significant decline of $6.014 million, or 29.4%, from the previous year.
Cost of Revenues
The total cost of revenues for H&E Equipment Services for the nine months ended September 30, 2024, was $624.9 million. Major components of these costs include:
- Rental Depreciation: $278.990 million
- Rental Expenses: $84.6 million
- Cost of Sales of Rental Equipment: $42.006 million
- Cost of New Equipment Sold: $28.777 million
- Parts and Service Costs: $10.000 million
Gross Profit Overview
Overall, for the nine months ended September 30, 2024, H&E Equipment Services reported a total gross profit of $507.599 million, an increase of $9.477 million, or 1.9%, from $498.122 million in 2023. The gross profit margin for this period was approximately 44.8%.
Net Income and Earnings
For the nine months ended September 30, 2024, the net income was reported at $90.218 million, a decrease from $115.769 million in the same period in 2023. The earnings per share (EPS) for this period was $2.49, down from $3.21 in 2023.
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Article updated on 8 Nov 2024
Resources:
- H&E Equipment Services, Inc. (HEES) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of H&E Equipment Services, Inc. (HEES)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View H&E Equipment Services, Inc. (HEES)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.