Q3 2024 Herc Holdings Inc Earnings Call Transcript
Key Points
- Herc Holdings Inc (HRI) achieved a 13.2% increase in rental revenue and an 8.8% increase in adjusted EBITDA, setting a record at $446 million.
- The company successfully expanded its market share through strategic acquisitions and Greenfield openings, adding 26 locations and opening 16 new branches year-to-date.
- Herc Holdings Inc (HRI) reported strong growth in its specialty equipment segment, which now represents approximately 23% of the total fleet.
- The company maintained pricing discipline, with rental rates increasing by 2.3% year-over-year in the quarter and 3.5% year-to-date.
- Herc Holdings Inc (HRI) continues to capitalize on mega projects, which are driving significant revenue growth and positioning the company as a top solutions provider in various end markets.
- The company faced challenges in the local market due to higher interest rates and macroeconomic uncertainties, impacting project starts and local rental business.
- New acquisitions and Greenfield locations initially generated lower incremental margins, affecting overall profitability in the short term.
- Herc Holdings Inc (HRI) experienced a decline in trailing 12-month ROIC by 160 basis points to 10%, partly due to the impact of acquisitions and Greenfield expansions.
- The company is dealing with near-term inefficiencies from new locations, which are expected to improve over time but currently weigh on fleet efficiency and dollar utilization.
- Higher interest expenses related to increased borrowings for acquisitions and rental equipment investments impacted net income.
Thank you for standing by. My name is John and I'll be your conference operator for today. At this time. I would like to welcome everyone to the Herc holdings third quarter, 2024 Ernie call at webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad to withdraw your question. Please press star run again. Thank you. I would now like to turn the call over to Leslie Hunziker, head of investor relations. Please go ahead.
Thank you operator and good morning everyone. Welcome to Herc rentals third quarter, 2024 earnings conference call and webcast. Earlier today, our press release and presentation slides were furnished and our 10 Q was filed with the SEC. All are posted on the events page of our IR website. Today, we're reviewing our third quarter, 2024 results with comments on
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