H&E Equipment Services Reports Mixed Q3 Results, Driven by Acquisitions and Rental Revenue Growth

H&E Equipment Services, Inc. reported its financial results for the three and nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, total revenues decreased to $384.9 million, down 4.0% from $400.7 million in the same period of 2023. However, for the nine months ended September 30, 2024, total revenues increased by 4.5% to $1.132 billion, compared to $1.083 billion in 2023. The growth in the nine-month period was primarily driven by a 7.4% increase in equipment rental revenues, which reached $933.9 million, up from $869.3 million in the prior year.

Gross profit for the three months ended September 30, 2024, was $171.5 million, a decrease of 9.0% from $188.4 million in the same quarter of 2023. For the nine-month period, gross profit increased slightly to $507.6 million from $498.1 million, although the gross profit margin declined to 44.8% from 46.0% in the previous year. The decline in profitability was attributed to increased costs, including a rise in selling, general, and administrative (SG&A) expenses, which increased by 13.3% to $338.6 million for the nine months ended September 30, 2024.

Net income for the three months ended September 30, 2024, was $31.1 million, down from $48.9 million in the same period of 2023. For the nine months, net income decreased to $90.2 million from $115.8 million in the prior year. Correspondingly, net income per share for the three months was $0.86, down from $1.35, and for the nine months, it was $2.49, down from $3.21.

Strategically, H&E Equipment Services completed several acquisitions, including Lewistown Rentals for approximately $33.8 million in May 2024, and Precision Rentals for about $124.0 million in January 2024. These acquisitions are expected to enhance the company's market presence and operational synergies. The company has also shifted to operate as a pure-play rental company, classifying equipment purchases based on intended use.

As of September 30, 2024, H&E Equipment Services reported total assets of $2.893 billion, an increase from $2.640 billion at the end of 2023. Cash balances rose to $11.1 million from $8.5 million, reflecting improved cash flow from operating activities, which totaled $366.2 million for the nine months, up from $276.5 million in the previous year. The company’s liquidity position remains strong, with available borrowings of approximately $472.4 million.