Second Quarter 2024 Highlights
– Record equipment rental revenue of $765 million, an increase
of 9% – Record total revenues of $848 million, an increase of 6% –
Rental pricing increased 3.5% year-over-year – M&A and
greenfield openings offset impact from decelerating local-market
revenue growth – Net income decreased 8% to $70 million, or $2.46
per diluted share – Adjusted EBITDA of $360 million increased 2%;
adjusted EBITDA margin of 42.5% – Free cash flow of $148 million
for the six months ended June 30, 2024
Herc Holdings Inc. (NYSE: HRI) ("Herc Holdings" or the
"Company") today reported financial results for the quarter ended
June 30, 2024.
“In the second quarter, we benefited from positive rental
pricing, increasing fleet efficiency, and expanding market share,
as we continue to significantly outpace rental-industry growth.
Overall, our record second quarter revenue results came in
according to our expectations. However, while national mega
projects are on plan, we saw a greater deceleration in the local
market's growth trajectory versus our forecast, primarily driven by
the persistently higher interest-rate environment. The
local-revenue deficit was essentially offset by contributions from
acquisitions that added 21 locations year to date, including 10 in
the second quarter,” said Larry Silber, president and chief
executive officer of Herc Rentals. "As is typical, these new
acquisitions and greenfields initially generate lower incremental
margins than our established local-account business, which
reflected an unfavorable trade-off in profitability in the second
quarter.
"Looking to the second half of the year, mega project activity
is ramping up into the peak season as anticipated. Higher revenue
growth for the rest of the year and incremental adjustments made in
the second quarter to better align our local cost structure should
support more normal margin and REBITDA flow through for the back
half of 2024," said Silber. “Based on current line-of-sight to
market trends, we expect to deliver record full year results and
are reaffirming our annual performance targets. Despite temporarily
slower growth in the more rate-sensitive local market this year,
the outlook for rental demand long-term is robust as the pipeline
for mega projects remains strong, data center construction is
accelerating, federal infrastructure spending continues to roll
out, and rental penetration increases.”
2024 Second Quarter Financial Results
- Total revenues increased 6% to $848 million compared to
$802 million in the prior-year period. The year-over-year increase
of $46 million primarily related to an increase in equipment rental
revenue of $63 million, reflecting positive pricing of 3.5% and
increased volume of 6.4%, partially offset by unfavorable mix
driven primarily by inflation. Sales of rental equipment decreased
by $18 million during the period.
- Dollar utilization increased to 41.0% in the second
quarter compared to 40.3% in the prior-year period.
- Direct operating expenses were $326 million, or 42.6% of
equipment rental revenue, compared to $282 million, or 40.2% in the
prior-year period. The slower than planned revenue growth in the
local market created inefficiencies related to headcount and
facilities expenses and actions were taken within the quarter to
reduce variable costs to align with the moderating local market
demand. Additionally, delivery expenses were higher due to internal
transfers of equipment to branches in higher growth regions to
drive fleet efficiency. Finally, insurance expense nearly doubled,
primarily related to increased self insurance reserves due to
claims development attributable to unsettled cases.
- Depreciation of rental equipment increased 2% to $165
million due to higher year-over-year average fleet size. Non-rental
depreciation and amortization increased 7% to $30 million primarily
due to amortization of acquisition intangible assets.
- Selling, general and administrative expenses was $120
million, or 15.7% of equipment rental revenue, compared to $111
million, or 15.8% in the prior-year period due to continued focus
on improving operating leverage while expanding revenues.
- Interest expense increased to $63 million compared with
$54 million in the prior-year period due to increased borrowings on
the ABL Credit Facility, primarily to fund acquisition growth and
invest in rental equipment, and higher interest rates on
floating-rate debt.
- Net income was $70 million compared to $76 million in
the prior-year period. Adjusted net income decreased 4% to $74
million, or $2.60 per diluted share, compared to $77 million, or
$2.69 per diluted share, in the prior-year period. The effective
tax rate was 25% compared to 26% in the prior-year period.
- Adjusted EBITDA increased 2% to $360 million compared to
$352 million in the prior-year period and adjusted EBITDA margin
was 42.5% compared to 43.9% in the prior-year period. Moderating
local-market demand coupled with increased operating expenses and a
reduction in margin on sales of used equipment impacted EBITDA
margin during the quarter.
2024 First Half Financial Results
- Total revenues increased 7% to $1,652 million compared
to $1,542 million in the prior-year period. The year-over-year
increase of $110 million primarily related to an increase in
equipment rental revenue of $128 million, reflecting positive
pricing of 4.3% and increased volume of 7.2%, partially offset by
unfavorable mix driven primarily by inflation. Sales of rental
equipment decreased by $20 million during the period.
- Dollar utilization increased to 40.4% compared to 40.0%
in the prior-year period.
- Direct operating expenses were $633 million, or 42.7% of
equipment rental revenue, compared to $563 million, or 41.5% in the
prior-year period. The slower than planned revenue growth in the
local market created inefficiencies related to headcount and
facilities expenses and actions were taken within the quarter to
reduce variable costs to align with the moderating local market
demand. Additionally, delivery expenses were higher due to internal
transfers of equipment to branches in higher growth regions to
drive fleet efficiency. Finally, insurance expense increased,
primarily related to increased self insurance reserves due to
claims development attributable to unsettled cases.
- Depreciation of rental equipment increased 4% to $325
million due to higher year-over-year average fleet size. Non-rental
depreciation and amortization increased 9% to $59 million primarily
due to amortization of acquisition intangible assets.
- Selling, general and administrative expenses was $235
million, or 15.8% of equipment rental revenue, compared to $217
million, or 16.0% in the prior-year period due to continued focus
on improving operating leverage while expanding revenues.
- Interest expense increased to $124 million compared with
$102 million in the prior-year period due to increased borrowings
on the ABL Credit Facility primarily to fund acquisition growth and
invest in rental equipment and higher interest rates on
floating-rate debt.
- Net income was $135 million compared to $143 million in
the prior-year period. Adjusted net income decreased 3% to $141
million, or $4.96 per diluted share, compared to $146 million, or
$5.03 per diluted share, in the prior-year period. The effective
tax rate was 22% compared to 20% in the prior-year period.
- Adjusted EBITDA increased 6% to $699 million compared to
$660 million in the prior-year period and adjusted EBITDA margin
was 42.3% compared to 42.8% in the prior-year period.
Rental Fleet
- Net rental equipment capital expenditures were as follows (in
millions):
Six Months Ended June
30,
2024
2023
Rental equipment expenditures
$
468
$
703
Proceeds from disposal of rental
equipment
(125
)
(131
)
Net rental equipment capital
expenditures
$
343
$
572
- As of June 30, 2024, the Company's total fleet was
approximately $6.7 billion at OEC.
- Average fleet at OEC in the second quarter increased 8%
compared to the prior-year period.
- Average fleet age was 47 months as of June 30, 2024 compared to
46 months in the comparable prior-year period.
Disciplined Capital Management
- The Company completed 6 acquisitions with a total of 21
locations and opened 11 new greenfield locations during the first
half of 2024.
- Net debt was $3.8 billion as of June 30, 2024, with net
leverage of 2.6x compared to 2.5x in the same prior-year period.
Cash and cash equivalents and unused commitments under the ABL
Credit Facility contributed to approximately $2.1 billion of
liquidity as of June 30, 2024.
- The Company declared its quarterly dividend of $0.665 paid to
shareholders of record as of May 31, 2024 on June 14, 2024.
- On June 7, 2024, the Company issued $800 million aggregate
principal amount of 2029 Notes. The funds were used to repay a
portion of the indebtedness outstanding under the Company’s senior
secured asset-based revolving credit agreement and to pay related
fees and expenses.
Subsequent Event
In July 2024, the Company acquired the assets of Otay Mesa Sales
("Otay") for approximately $264 million. Otay was a full-service
general equipment rental company comprising approximately 135
employees with four locations serving construction and industrial
customers throughout the metropolitan areas of San Diego,
California and Phoenix and Yuma, Arizona.
Outlook
The Company is reaffirming its full year 2024 equipment rental
revenue growth, adjusted EBITDA, and gross and net rental capital
expenditures guidance ranges presented below, excluding Cinelease
studio entertainment and lighting and grip equipment rental
business. The guidance range for the full year 2024 adjusted EBITDA
reflects an increase of 6% to 9% compared to full year 2023
results, excluding Cinelease. The sale process for the Cinelease
studio entertainment business is ongoing.
Equipment rental revenue growth:
7% to 10%
Adjusted EBITDA:
$1.55 billion to $1.60
billion
Net rental equipment capital expenditures
after gross capex:
$500 million to $700 million,
after gross capex of $750 million to $1 billion
As a leader in an industry where scale matters, the Company
expects to continue to gain share by capturing an outsized position
of the forecasted higher construction spending in 2024 by investing
in its fleet, optimizing its existing fleet, capitalizing on
strategic acquisitions and greenfield opportunities, and
cross-selling a diversified product portfolio.
Earnings Call and Webcast Information
Herc Holdings' second quarter 2024 earnings webcast will be held
today at 8:30 a.m. U.S. Eastern Time. Interested U.S. parties may
call +1-800-715-9871 and international participants should call the
country specific dial in numbers listed at
https://registrations.events/directory/international/itfs.html,
using the access code: 9128891. Please dial in at least 10 minutes
before the call start time to ensure that you are connected to the
call and to register your name and company.
Those who wish to listen to the live conference call and view
the accompanying presentation slides should visit the Events and
Presentations tab of the Investor Relations section of the
Company's website at IR.HercRentals.com. The press release and
presentation slides for the call will be posted to this section of
the website prior to the call.
A replay of the conference call will be available via webcast on
the Company website at IR.HercRentals.com, where it will be
archived for 12 months after the call.
About Herc Holdings Inc.
Founded in 1965, Herc Holdings Inc., which operates through its
Herc Rentals Inc. subsidiary, is a full-line rental supplier with
428 locations across North America, and 2023 total revenues were
approximately $3.3 billion. We offer products and services aimed at
helping customers work more efficiently, effectively, and safely.
Our classic fleet includes aerial, earthmoving, material handling,
trucks and trailers, air compressors, compaction, and lighting
equipment. Our ProSolutions® offering includes industry-specific,
solutions-based services in tandem with power generation, climate
control, remediation and restoration, pumps, and trench shorting
equipment as well as our ProContractor professional grade tools. We
employ approximately 7,600 employees, who equip our customers and
communities to build a brighter future. Learn more at
www.HercRentals.com and follow us on Instagram, Facebook and
LinkedIn.
Certain Additional Information
In this release we refer to the following operating
measures:
- Dollar utilization: calculated by dividing rental revenue
(excluding re-rent, delivery, pick-up and other ancillary revenue)
by the average OEC of the equipment fleet for the relevant time
period, based on the guidelines of the American Rental Association
(ARA).
- OEC: original equipment cost based on the guidelines of the
ARA, which is calculated as the cost of the asset at the time it
was first purchased plus additional capitalized refurbishment costs
(with the basis of refurbished assets reset at the refurbishment
date).
Forward-Looking Statements
This press release includes forward-looking statements as that
term is defined by the federal securities laws, including
statements concerning our business plans and strategy, projected
profitability, performance or cash flows, future capital
expenditures, our growth strategy, including our ability to grow
organically and through M&A, anticipated financing needs,
business trends, our capital allocation strategy, liquidity and
capital management, exploring strategic alternatives for Cinelease,
including the timing of the review process, the outcome of the
process and the costs and benefits of the process, and other
information that is not historical information. Forward looking
statements are generally identified by the words "estimates,"
"expects," "anticipates," "projects," "plans," "intends,"
"believes," "forecasts," "looks," and future or conditional verbs,
such as "will," "should," "could" or "may," as well as variations
of such words or similar expressions. All forward-looking
statements are based upon our current expectations and various
assumptions and there can be no assurance that our current
expectations will be achieved. They are subject to future events,
risks and uncertainties - many of which are beyond our control - as
well as potentially inaccurate assumptions, that could cause actual
results to differ materially from those in the forward-looking
statements. Further information on the risks that may affect our
business is included in filings we make with the Securities and
Exchange Commission from time to time, including our most recent
annual report on Form 10-K, subsequent quarterly reports on Form
10-Q, and in our other SEC filings. We undertake no obligation to
update or revise forward-looking statements that have been made to
reflect events or circumstances that arise after the date made or
to reflect the occurrence of unanticipated events.
Information Regarding Non-GAAP Financial Measures
In addition to results calculated according to accounting
principles generally accepted in the United States (“GAAP”), the
Company has provided certain information in this release that is
not calculated according to GAAP (“non-GAAP”), such as EBITDA,
adjusted EBITDA, adjusted EBITDA margin, adjusted net income,
adjusted earnings per diluted common share, free cash flow and
certain results excluding the Cinelease studio entertainment
business. Management uses these non-GAAP measures to evaluate
operating performance and period-over-period performance of our
core business without regard to potential distortions, and believes
that investors will likewise find these non-GAAP measures useful in
evaluating the Company’s performance. These measures are frequently
used by security analysts, institutional investors and other
interested parties in the evaluation of companies in our industry.
Non-GAAP measures should not be considered in isolation or as a
substitute for our reported results prepared in accordance with
GAAP and, as calculated, may not be comparable to similarly titled
measures of other companies. For the definitions of these terms,
further information about management’s use of these measures as
well as a reconciliation of these non-GAAP measures to the most
comparable GAAP financial measures, please see the supplemental
schedules that accompany this release.
(See Accompanying Tables)
HERC HOLDINGS INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS
Unaudited
(In millions, except per share
data)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Revenues:
Equipment rental
$
765
$
702
$
1,484
$
1,356
Sales of rental equipment
65
83
134
154
Sales of new equipment, parts and
supplies
10
10
19
18
Service and other revenue
8
7
15
14
Total revenues
848
802
1,652
1,542
Expenses:
Direct operating
326
282
633
563
Depreciation of rental equipment
165
161
325
313
Cost of sales of rental equipment
45
56
91
102
Cost of sales of new equipment, parts and
supplies
6
7
12
12
Selling, general and administrative
120
111
235
217
Non-rental depreciation and
amortization
30
28
59
54
Interest expense, net
63
54
124
102
Other expense (income), net
—
—
(1
)
1
Total expenses
755
699
1,478
1,364
Income before income taxes
93
103
174
178
Income tax provision
(23
)
(27
)
(39
)
(35
)
Net income
$
70
$
76
$
135
$
143
Weighted average shares
outstanding:
Basic
28.4
28.4
28.3
28.7
Diluted
28.5
28.6
28.4
29.0
Earnings per share:
Basic
$
2.46
$
2.68
$
4.77
$
4.98
Diluted
$
2.46
$
2.66
$
4.75
$
4.93
A - 1
HERC HOLDINGS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In millions)
June 30, 2024
December 31, 2023
ASSETS
(unaudited)
Cash and cash equivalents
$
70
$
71
Receivables, net of allowances
570
563
Other current assets
55
77
Current assets held for sale
22
21
Total current assets
717
732
Rental equipment, net
4,013
3,831
Property and equipment, net
517
465
Right-of-use lease assets
803
665
Goodwill and intangible assets, net
1,104
950
Other long-term assets
9
10
Long-term assets held for sale
412
408
Total assets
$
7,575
$
7,061
LIABILITIES AND EQUITY
Current maturities of long-term debt and
financing obligations
$
19
$
19
Current maturities of operating lease
liabilities
38
37
Accounts payable
286
212
Accrued liabilities
221
221
Current liabilities held for sale
21
19
Total current liabilities
585
508
Long-term debt, net
3,864
3,673
Financing obligations, net
102
104
Operating lease liabilities
789
646
Deferred tax liabilities
761
743
Other long term liabilities
49
46
Long-term liabilities held for sale
63
68
Total liabilities
6,213
5,788
Total equity
1,362
1,273
Total liabilities and equity
$
7,575
$
7,061
A - 2
HERC HOLDINGS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
Unaudited
(In millions)
Six Months Ended June
30,
2024
2023
Cash flows from operating
activities:
Net income
$
135
$
143
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation of rental equipment
325
313
Depreciation of property and equipment
39
34
Amortization of intangible assets
20
20
Amortization of deferred debt and
financing obligations costs
2
2
Stock-based compensation charges
9
9
Provision for receivables allowances
28
30
Deferred taxes
20
20
Gain on sale of rental equipment
(43
)
(52
)
Other
6
3
Changes in assets and liabilities:
Receivables
(22
)
(24
)
Other assets
9
1
Accounts payable
13
(6
)
Accrued liabilities and other long-term
liabilities
17
23
Net cash provided by operating
activities
558
516
Cash flows from investing
activities:
Rental equipment expenditures
(468
)
(703
)
Proceeds from disposal of rental
equipment
125
131
Non-rental capital expenditures
(71
)
(77
)
Proceeds from disposal of property and
equipment
4
6
Acquisitions, net of cash acquired
(290
)
(272
)
Other investing activities
—
(15
)
Net cash used in investing
activities
(700
)
(930
)
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt
800
—
Proceeds from revolving lines of credit
and securitization
840
1,290
Repayments on revolving lines of credit
and securitization
(1,433
)
(719
)
Principal payments under finance lease and
financing obligations
(10
)
(8
)
Dividends paid
(39
)
(38
)
Repurchase of common stock
—
(107
)
Other financing activities, net
(17
)
(21
)
Net cash provided by financing
activities
141
397
Effect of foreign exchange rate changes on
cash and cash equivalents
—
—
Net change in cash and cash equivalents
during the period
(1
)
(17
)
Cash and cash equivalents at beginning of
period
71
54
Cash and cash equivalents at end of
period
$
70
$
37
A - 3
HERC HOLDINGS INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES EBITDA AND ADJUSTED EBITDA
RECONCILIATIONS Unaudited (In millions)
EBITDA and adjusted EBITDA - EBITDA represents the sum of
net income (loss), provision (benefit) for income taxes, interest
expense, net, depreciation of rental equipment and non-rental
depreciation and amortization. Adjusted EBITDA represents EBITDA
plus the sum of transaction related costs, restructuring and
restructuring related charges, spin-off costs, non-cash stock-based
compensation charges, loss on extinguishment of debt (which is
included in interest expense, net), impairment charges, gain (loss)
on the disposal of a business and certain other items. EBITDA and
adjusted EBITDA do not purport to be alternatives to net income as
an indicator of operating performance. Additionally, neither
measure purports to be an alternative to cash flows from operating
activities as a measure of liquidity, as they do not consider
certain cash requirements such as interest payments and tax
payments.
Adjusted EBITDA Margin - Adjusted EBITDA Margin,
calculated by dividing Adjusted EBITDA by Total Revenues, is a
commonly used profitability ratio.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income
$
70
$
76
$
135
$
143
Income tax provision
23
27
39
35
Interest expense, net
63
54
124
102
Depreciation of rental equipment
165
161
325
313
Non-rental depreciation and
amortization
30
28
59
54
EBITDA
351
346
682
647
Non-cash stock-based compensation
charges
4
5
9
9
Transaction related costs
3
1
6
3
Other(1)
2
—
2
1
Adjusted EBITDA
$
360
$
352
$
699
$
660
Total revenues
$
848
$
802
$
1,652
$
1,542
Adjusted EBITDA
$
360
$
352
$
699
$
660
Adjusted EBITDA margin
42.5
%
43.9
%
42.3
%
42.8
%
(1) Other consists of restructuring
charges and spin-off costs.
A - 4
HERC HOLDINGS INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES EBITDA, ADJUSTED EBITDA AND
ADJUSTED REBITDA EXCLUDING STUDIO ENTERTAINMENT
RECONCILIATIONS Unaudited (in millions)
EBITDA, Adjusted EBITDA, REBITDA, Adjusted EBITDA Margin,
REBITDA Margin and REBITDA Flow-Through Excluding Studio
Entertainment - Each metric below has been adjusted to exclude
the studio entertainment business due to the intent to sell that
business and provides the operating performance of the remaining
business.
Three Months Ended June 30,
2024
Three Months Ended June 30,
2023
Herc
Studio
Ex-Studio
Herc
Studio
Ex-Studio
Equipment rental revenue
$
765
$
26
$
739
$
702
$
16
$
686
Total revenues
848
29
819
802
18
784
Total expenses
755
21
734
699
27
672
Income (loss) before income taxes
93
8
85
103
(9
)
112
Income tax (provision) benefit
(23
)
(4
)
(19
)
(27
)
2
(29
)
Net income
70
4
66
76
(7
)
83
Income tax provision
23
4
19
27
(2
)
29
Interest expense, net
63
—
63
54
—
54
Depreciation of rental equipment
165
—
165
161
8
153
Non-rental depreciation and
amortization
30
—
30
28
1
27
EBITDA
351
8
343
346
—
346
Non-cash stock-based compensation
charges
4
—
4
5
—
5
Transaction related costs
3
—
3
1
—
1
Other
2
—
2
—
—
—
Adjusted EBITDA
360
8
352
352
—
352
Less: Gain (loss) on sales of rental
equipment
20
1
19
27
—
27
Less: Gain (loss) on sales of new
equipment, parts and supplies
4
1
3
3
—
3
Rental Adjusted EBITDA
(REBITDA)
$
336
$
6
$
330
$
322
$
—
$
322
Total revenues
$
848
$
29
$
819
$
802
$
18
$
784
Adjusted EBITDA
$
360
$
8
$
352
$
352
$
—
$
352
Adjusted EBITDA margin
42.5
%
27.6
%
43.0
%
43.9
%
—
%
44.9
%
Total revenues
$
848
$
29
$
819
$
802
$
18
$
784
Less: Sales of rental equipment
65
—
65
83
—
83
Less: Sales of new equipment, parts and
supplies
10
2
8
10
—
10
Equipment rental, service and other
revenues
$
773
$
27
$
746
$
709
$
18
$
691
Equipment rental, service and other
revenues
$
773
$
27
$
746
$
709
$
18
$
691
Adjusted REBITDA
$
336
$
6
$
330
$
322
$
—
$
322
Adjusted REBITDA Margin
43.5
%
22.2
%
44.2
%
45.4
%
—
%
46.6
%
A - 5
HERC HOLDINGS INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES EBITDA, ADJUSTED EBITDA AND
ADJUSTED REBITDA EXCLUDING STUDIO ENTERTAINMENT
RECONCILIATIONS Unaudited (In millions)
EBITDA, Adjusted EBITDA, REBITDA, Adjusted EBITDA Margin,
REBITDA Margin and REBITDA Flow-Through Excluding Studio
Entertainment - Each metric below has been adjusted to exclude
the studio entertainment business due to the intent to sell that
business and provides the operating performance of the remaining
business.
Six Months Ended June 30,
2024
Six Months Ended June 30,
2023
Herc
Studio
Ex-Studio
Herc
Studio
Ex-Studio
Equipment rental revenue
$
1,484
$
55
$
1,429
$
1,356
$
35
$
1,321
Total revenues
1,652
59
1,593
1,542
38
1,504
Total expenses
1,478
42
1,436
1,364
55
1,309
Income (loss) before income taxes
174
17
157
178
(17
)
195
Income tax (provision) benefit
(39
)
(6
)
(33
)
(35
)
4
(39
)
Net income
135
11
124
143
(13
)
156
Income tax provision
39
6
33
35
(4
)
39
Interest expense, net
124
—
124
102
—
102
Depreciation of rental equipment
325
—
325
313
16
297
Non-rental depreciation and
amortization
59
—
59
54
2
52
EBITDA
682
17
665
647
1
646
Non-cash stock-based compensation
charges
9
—
9
9
—
9
Transaction related costs
6
1
5
3
—
3
Other
2
—
2
1
1
—
Adjusted EBITDA
699
18
681
660
2
658
Less: Gain (loss) on sales of rental
equipment
43
1
42
52
—
52
Less: Gain (loss) on sales of new
equipment, parts and supplies
7
2
5
6
—
6
Rental Adjusted EBITDA
(REBITDA)
$
649
$
15
$
634
$
602
$
2
$
600
Total revenues
$
1,652
$
59
$
1,593
$
1,542
$
38
$
1,504
Adjusted EBITDA
$
699
$
18
$
681
$
660
$
2
$
658
Adjusted EBITDA margin
42.3
%
30.5
%
42.7
%
42.8
%
5.3
%
43.8
%
Total revenues
$
1,652
$
59
$
1,593
$
1,542
$
38
$
1,504
Less: Sales of rental equipment
134
—
134
154
—
154
Less: Sales of new equipment, parts and
supplies
19
3
16
18
—
18
Equipment rental, service and other
revenues
$
1,499
$
56
$
1,443
$
1,370
$
38
$
1,332
Equipment rental, service and other
revenues
$
1,499
$
56
$
1,443
$
1,370
$
38
$
1,332
Adjusted REBITDA
$
649
$
15
$
634
$
602
$
2
$
600
Adjusted REBITDA Margin
43.3
%
26.8
%
43.9
%
43.9
%
5.3
%
45.0
%
A - 6
HERC HOLDINGS INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES ADJUSTED NET INCOME AND ADJUSTED
EARNINGS PER DILUTED SHARE Unaudited (In
millions)
Adjusted Net Income and Adjusted Earnings Per Diluted
Share - Adjusted Net Income represents the sum of net income
(loss), restructuring and restructuring related charges, spin-off
costs, loss on extinguishment of debt, impairment charges,
transaction related costs, gain (loss) on the disposal of a
business and certain other items. Adjusted Earnings per Diluted
Share represents Adjusted Net Income divided by diluted shares
outstanding. Adjusted Net Income and Adjusted Earnings Per Diluted
Share are important measures to evaluate our results of operations
between periods on a more comparable basis and to help investors
analyze underlying trends in our business, evaluate the performance
of our business both on an absolute basis and relative to our peers
and the broader market, provide useful information to both
management and investors by excluding certain items that may not be
indicative of our core operating results and operational strength
of our business.
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
Net income
$
70
$
76
$
135
$
143
Transaction related costs
3
1
6
3
Other(1)
2
—
2
1
Tax impact of adjustments(2)
(1
)
—
(2
)
(1
)
Adjusted net income
$
74
$
77
$
141
$
146
Diluted shares outstanding
28.5
28.6
28.4
29.0
Adjusted earnings per diluted
share
$
2.60
$
2.69
$
4.96
$
5.03
(1) Other consists of restructuring
charges and spin-off costs.
(2) The tax rate applied for adjustments
is 25.5% in the three and six months ended June 30, 2024 and 25.7%
in the three and six months ended June 30, 2023 and reflects the
statutory rates in the applicable entities.
A - 7
HERC HOLDINGS INC. AND SUBSIDIARIES
SUPPLEMENTAL SCHEDULES FREE CASH FLOW
Unaudited (In millions)
Free cash flow represents net cash provided by (used in)
operating activities less rental equipment expenditures and
non-rental capital expenditures, plus proceeds from disposal of
rental equipment, proceeds from disposal of property and equipment,
and other investing activities. Free cash flow is used by
management in analyzing the Company’s ability to service and repay
its debt, fund potential acquisitions and to forecast future
periods. However, this measure does not represent funds available
for investment or other discretionary uses since it does not deduct
cash used to service debt or for other non-discretionary
expenditures.
Six Months Ended June
30,
2024
2023
Net cash provided by operating
activities
$
558
$
516
Rental equipment expenditures
(468
)
(703
)
Proceeds from disposal of rental
equipment
125
131
Net rental equipment
expenditures
(343
)
(572
)
Non-rental capital expenditures
(71
)
(77
)
Proceeds from disposal of property and
equipment
4
6
Other
—
(15
)
Free cash flow
$
148
$
(142
)
Acquisitions, net of cash acquired
(290
)
(272
)
Increase in net debt, excluding
financing activities
$
(142
)
$
(414
)
A - 8
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240723701728/en/
Leslie Hunziker (239) 301-1675
Herc (NYSE:HRI)
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From Nov 2024 to Dec 2024
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From Dec 2023 to Dec 2024
