Herc Holdings, parent of Herc Rentals, reported a 2.4 percent increase in rental revenues during 1Q 2020 compared to the same period last year. Total revenues told a different story, however, down 9 percent for the same quarter year-over-year ($437.2 million compared with $475.7 million in the prior year).
Although equipment rental revenues in 1Q increased to $386.5 million compared with $377.6 million for the same period last year, Herc noted that “strong year-over-year improvement in pricing was partially offset by lower volume, as the impact of COVID-19 related orders began to slow the typical upturn in seasonal volume in mid-March.”
“Equipment rental revenue improved year-over-year in the first quarter primarily due to positive rate growth,” says Larry Silber, president and chief executive officer.
“We are proud to be providing essential support to customers in a diverse mix of critical infrastructure sectors and nearly all of our branches are open and operating,” Silber says. “Our ProSolutions team has been especially busy providing critical support to medical centers, hospitals and additional patient facilities.”
The $39.5 million decline in total revenues was the result of a reduction in sales of rental equipment of $45.1 million, and $3.9 million reduction in sales of new equipment, parts and supplies compared to the prior year, according to Herc.
Silber says Herc has “taken steps to substantially reduce our capital expenditures to conserve capital,” noting the firm had “ample liquidity of $1.1 billion” at the end of the first quarter.
As with most companies right now, Herc has withdrawn its 2020 guidance. “Nonetheless, we believe the steps we have taken provide ample liquidity to fund our business in 2020 and beyond,” Silber says.