In announcing its 2Q results, United Rentals says rental revenues increased by 20.2 percent compared with the same period in 2018, a company record high for the period. The company attributes much of this boost to its acquisitions of BlueLine and BakerCorp.
United Rentals bought BlueLine in July 2018 and BakerCorp in October 2018.
“The market outlook for the second half of 2019 remains positive based on feedback from our customers and the field,” says Matthew Flannery, CEO of United Rentals. “The multiple integrations we have underway will continue to gain traction in the back part of the year.”
Even with overall positive results, Flannery says United has “slightly slower than expected pace” for integrating its BlueLine acquisition and experienced “historically bad weather in several key regions.” As a result, the company has “trimmed the upper ends on total revenue and adjusted EBITDA by approximately 1 percent and CapEx by $150 million, while raising our free cash flow expectation,” he says. “We remain confident in the health of the cycle and are well-positioned to serve our customers with the strongest service offering in our history.”
Fleet productivity: “Second quarter fleet productivity decreased 3.1 percent year-over-year, primarily due to the impact of the BakerCorp and BlueLine acquisitions. On a pro forma basis, fleet productivity increased 0.7 percent, reflecting improvements in rental rates and fleet mix, partially offset by lower time utilization, primarily due to acquisition integration activities and adverse weather.”
Used Equipment: “The company generated $197 million of proceeds from used equipment sales in the second quarter at a GAAP gross margin of 41.1 percent and an adjusted gross margin of 49.2 percent; this compares with $157 million at a GAAP gross margin of 41.4 percent and an adjusted gross margin of 51.6 percent for the same period last year.”
Specialty: “Second quarter rental revenue for the company’s specialty segment, Trench, Power and Fluid Solutions, increased by 44.8 percent year-over-year, including an organic increase of 12.6 percent. Rental gross margin decreased by 250 basis points to 46.0 percent, primarily due to the impact of acquisitions.”