Q1 Earnings Roundup: Alta Equipment, Toromont, H&E Equipment Services

Alta Equipment service technician diagnoses Volvo construction equipment
Alta Equipment

Alta Equipment Posts Record Q1 Results

Alta Equipment reported a 23.4% increase in net revenues for the first quarter of 2022, with construction and material handling revenue of $206.1 million and $125.6 million, respectively.

The company says the record first quarter financial results were primarily due to strong demand for equipment and product support growth.

“We remain extremely focused on operational excellence and as a result, delivered both solid organic and acquisition-related revenue growth. Consistent with our fourth quarter results, our Construction and Material Handling segments continued to benefit from the strong tailwinds in our end-user markets, producing significant year-over-year revenue growth on a combined basis, despite ongoing supply chain issues,” said Ryan Greenawalt, CEO of Alta. “Our flexible business model, increased product support revenues driven by higher new and used equipment sales, and expansion into higher margin specialty segments will continue to have a positive impact on future profitability.”

Discussing the current market environment, Greenawalt added, “Customer sentiment, project activity and visibility remains extremely positive across all our operating markets. Demand for new and used equipment and rental equipment has eclipsed pre-pandemic peak levels. As an example, our organic physical rental fleet utilization was up more than 5 percentage points from a year ago and rates on rental equipment continued to strengthen in the first quarter. We are operating in a fundamentally robust expansion cycle and all the industry indicators are extremely encouraging for the balance of the year. While the timing is uncertain, the recently passed Bipartisan Infrastructure bill should also be an incremental benefit to our business.”

Alta has operated as an equipment dealership for 37 years and has developed a branch network that includes over 55 total locations across Michigan, Illinois, Indiana, New England, New York, Virginia, Florida, and Ohio.

Toromont Revenues Rise 7% in Q1 2022

Canadian Caterpillar dealer Toromont saw its revenues increase 7 percent in the first quarter of 2022 compared with the same period last year.

Revenues for the company’s Equipment Group were up $59.2 million or 8 percent to $786.6 million for the quarter with higher activity in both rental, used equipment and product support, combined with moderate new equipment sales across most regions.

Global supply chain challenges continue to impact equipment deliveries. The Equipment Group reported backlogs of $1.3 billion at the end of March 2022, up 85 percent from the end of March 2021, reflecting healthy order levels in the latter part of 2021. Approximately 80 percent of the backlog is expected to be delivered this year, subject to receipt of equipment from suppliers.

“We value our team’s ongoing commitment to adapt to changes in the business environment and focus on executing customer deliverables. Activity remained sound with favorable backlog levels, but supply chains are challenged. This has restricted availability and is likely to result in delivery date extensions. Pandemic issues remain and we continue to monitor inflationary pressures and supply-demand dynamics as the economic environment changes,” the company said in a statement.  

“Technician hiring remains a priority to our product support offering and to meet growing demand. The diversity of our geographic landscape and markets served, extensive product and service offerings, technology investments and financial strength, together with our disciplined operating culture, continue to position us well.” 

H&E Equipment Services Sees 13% Increase in Q1 2022 Revenue

The combination of seasonally strong fleet utilization, rising rental rates and fleet growth drove a 13 percent increase in revenue for H&E Equipment Services in the first quarter of 2022 versus the same period last year.

Total equipment rental revenues for the first quarter of 2022 jumped 30 percent to $199.2 million, compared to $153.2 million in the first quarter of 2021.

The company’s rental fleet saw an average time utilization of 70 percent. This high utilization drove revenue up by 29.2% to $177.2 million for the quarter.  

On the sales side, used equipment sales decreased 44.6% in the first quarter of 2022 to $21.5 million and new equipment sales totaled $26.0 million, an increase of 12.4% when compared to the first quarter of 2021.

CEO Brad Barber noted the strong start to 2022 and characterized the full-year outlook for the equipment rental business as excellent, commenting, “Our end-markets are displaying impressive strength, driven by growing non-residential construction and industrial activity. These important sectors accounted for 77% of our total revenues in 2021. We are confident that our 2022 gross capital expenditure projection of $550 million to $600 million is appropriately timed and positions the Company to address the expected growth across our regions of operation. As our rental fleet grows throughout the year, it will do so in a business environment that remains fundamentally robust."