Essex Rental Corp. (Nasdaq: ESSX) ("Essex") today
announced its consolidated results for the first quarter ended
March 31, 2015.
First Quarter 2015 Highlights
- Hydraulic crawler crane utilization
increased to 73.0% for the three month period ended March 31, 2015
compared to 57.5% for the three month period ended March 31,
2014;
- Crawler crane rental backlog based on
expected rental revenues as of March 31, 2015 increased by 40.8%
compared to the backlog as of March 31, 2014;
- City and other tower crane utilization
increased to 56.5% for the three month period ended March 31, 2015
compared to 39.1% for the three month period ended March 31, 2014.
Self-Erecting tower crane utilization increased to 51.4% for the
three month period ended March 31, 2015 compared to 44.1% for the
three month period ended March 31, 2014. Rental revenue generated
from tower cranes in the quarter was at its highest level since we
acquired these assets;
- Equipment rental revenue increased by
$1.0 million or 9.1% for the three month period ended March 31,
2015 compared to the three month period ended March 31, 2014;
- Essex Crane rental segment gross profit
increased by approximately $400,000 or 55.9% for the three month
period ended March 31, 2015 compared to the three month period
ended March 31, 2014; and
- Coast Crane rental segment gross profit
increased by approximately $500,000 or 23.7% for the three month
period ended March 31, 2015 compared to the three month period
ended March 31, 2014;
Nick Matthews, President and CEO of Essex stated, “The continued
strength in utilization of our hydraulic crawler crane and tower
crane fleets was the primary driver of the $1.0 million year over
year increase in equipment rental revenue. The operating leverage
inherent in our model has become more apparent as the rental
segments of both Essex Crane and Coast Crane improved quarterly
gross profit and gross profit percentage materially compared to the
same period in 2014.”
Mr. Matthews continued, “We continue to experience more active
rental end markets and anticipate that this trend will continue
throughout 2015. As we progress out of our seasonal soft period and
move past some of the non-recurring costs and restatement issues
that negatively impacted our first quarter results, we are excited
to continue the progress we made on our strategic initiatives and
make operational improvements to efficiently manage the increased
activity expected from the broad array of end markets that we
serve.”
First Quarter 2015 Overview
Essex Crane equipment rentals segment revenues were $7.9 million
for the three month period ended March 31, 2015 versus $8.3 million
for the three month period ended March 31, 2014. Essex Crane
equipment rentals segment revenues include rental, transportation
and used rental equipment sales generated from the Essex Crane
subsidiary. The $400,000 decrease was driven by a $500,000 decrease
in used rental equipment sales and a $400,000 decrease in
transportation revenue. Those decreases were partially offset by a
$500,000 increase in equipment rental revenue. Despite the decrease
in overall revenue, gross profit increased by $400,000 or 55.9% due
primarily to stronger margins from equipment rentals and
transportation.
Coast Crane equipment rentals segment revenues were $6.6 million
for the three month period ended March 31, 2015 versus $6.8 million
for the three month period ended March 31, 2014. Coast Crane
equipment rentals segment revenues include rental, transportation
and used rental equipment sales from the Coast Crane subsidiary.
The $200,000 decrease was driven by an $800,000 decrease in used
rental equipment sales, partially offset by a $500,000 increase in
equipment rental revenue and a $100,000 increase in transportation
revenue. Despite the decrease in overall revenue, gross profit
increased by $500,000 or 23.7% due to primarily to stronger margins
from equipment rentals and transportation.
Equipment distribution revenue, which includes the retail
distribution of new and used equipment, but excludes the proceeds
received from the sale of used rental equipment, was $2.8 million
for the three month period ended March 31, 2015 compared to $1.3
million for the three month period ended March 31, 2014.
Parts and service revenue increased to $4.8 million for the
three month period ended March 31, 2015 compared to $4.6 million
for the three month period ended March 31, 2014. Parts and service
segment revenues include retail parts sales, billable service work
done on our own equipment and servicing customer owned
equipment.
Total gross profit increased 19.4% to $5.0 million for the three
month period ended March 31, 2015 from $4.2 million for the three
month period ended March 31, 2014. The increase is primarily due to
the increase in gross profit generated from the equipment rentals
segments. Gross profit margin increased to 22.6% for the three
month period ended March 31, 2015 from 19.8% for the three month
period ended March 31, 2014.
Selling, general and administrative expenses excluding non-cash
compensation and non-recurring expenses increased by 12.5% to $6.0
million for the three month period ended March 31, 2015 as compared
to $5.4 million for the three month period ended March 31, 2014.
The increase is primarily a function of filling positions that were
vacant in the first quarter of 2014 and an increase of bad debt
expense related to a one-time write off of receivables for a
bankrupt customer, which was approximately $100,000.
EBITDA before non-cash compensation and non-recurring expenses
was $3.4 million for the three month periods ended March 31, 2015
and March 31, 2014. Non-cash compensation and non-recurring
expenses were $400,000 for the three month period ended March 31,
2015 and $500,000 for the three month period ended March 31,
2014.
Conference Call
Essex’s management team will conduct a conference call to
discuss the operating results at 9:00 a.m. ET on Thursday, May 7,
2015. Interested parties may participate in the call by dialing
(877) 407-8291 (Domestic) and (201) 689-8345 (International).
Please dial in 10 minutes before the call is scheduled to begin,
and ask for the Essex Rental Corp. call.
The conference call will be webcast live via the Investor
Relations section ("Events and Presentations") of the Essex Rental
Corp. website at www.essexrentalcorp.com. To listen to the live
call, please go to the website at least 15 minutes early to
register, download and install any necessary audio software. If you
are unable to listen live, the conference call will be archived on
the website.
About Essex Rental Corp.
Essex, through its subsidiaries, is one of North America's
largest providers of rental and distribution for mobile cranes
(including lattice-boom crawler cranes, truck cranes and rough
terrain cranes), self-erecting cranes, stationary tower cranes,
elevators and hoists, and other lifting equipment used in a wide
array of construction projects. In addition, the Company provides
product support including installation, maintenance, repair, and
parts and services for equipment provided and other equipment used
by its construction industry customers. With a large fleet,
consisting primarily of cranes, as well as other construction
equipment and unparalleled customer service and support, Essex
supplies a wide variety of innovative lifting solutions for
construction projects related to power generation, petro-chemical,
refineries, water treatment and purification, bridges, highways,
hospitals, shipbuilding, offshore oil fabrication and industrial
plants, and commercial and residential construction.
Some of the statements in this press release and other written
and oral statements made from time to time by Essex and its
representatives are "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended.
These statements include statements regarding the intent and belief
or current expectations of Essex and its management team and may be
identified by the use of words like "anticipate", "believe",
"estimate", "expect", "intend", "may", "plan", "will", "should",
"seek", the negative of these terms or other comparable
terminology. Investors are cautioned that any such forward-looking
statements are not guarantees of future performance and involve
risks and uncertainties, and that actual results may differ
materially from those projected in the forward-looking statements.
Important factors that could cause actual results to differ
materially from Essex's expectations include, without limitation,
the continued ability of Essex to successfully execute its business
plan, the possibility of a change in demand for the products and
services that Essex provides, intense competition which may require
us to lower prices or offer more favorable terms of sale, our
reliance on third party suppliers, our indebtedness which could
limit our operational and financial flexibility, global economic
factors including interest rates, general economic conditions,
geopolitical events and regulatory changes, our dependence on our
management team and key personnel, as well as other relevant risks
detailed in our Annual Report on Form 10-K and other periodic
reports filed with the Securities and Exchange Commission and
available on our website, www.essexrentalcorp.com. The factors
listed here are not exhaustive. Many of these uncertainties and
risks are difficult to predict and beyond management's control.
Forward-looking statements are not guarantees of future
performance, results or events. Essex assumes no obligation to
update or supplement forward-looking information in this press
release whether to reflect changed assumptions, the occurrence of
unanticipated events or changes in future operating results or
financial conditions, or otherwise.
This press release includes references to adjusted EBITDA, an
unaudited financial measure of performance which is not calculated
in accordance with generally accepted accounting principles, or
GAAP. Adjusted EBITDA represents the sum of net income, tax
benefit, foreign currency exchange gains and losses, interest
expense, other income, depreciation, amortization and impairment
expense. Adjusted EBITDA is used internally when evaluating our
operating performance and, we believe, allows investors to make a
more meaningful comparison between our core business operating
results over different periods of time, as well as with those of
other similar companies. Management believes that adjusted EBITDA,
when viewed with the Company's results under GAAP and the
accompanying reconciliation, provides useful information about
operating performance and period-over-period growth, and provides
additional information that is useful for evaluating the operating
performance of our core business without regard to potential
distortions. Additionally, management believes that adjusted EBITDA
permits investors to gain an understanding of the factors and
trends affecting our ongoing cash earnings. However, adjusted
EBITDA is not a measure of financial performance or liquidity under
GAAP and, accordingly, should not be considered as an alternative
to net income or cash flow from operating activities as indicators
of operating performance or liquidity. Adjusted EBITDA has been
presented as a supplemental disclosure because adjusted EBITDA is a
widely used measure of performance and basis for valuation. A
reconciliation of adjusted EBITDA to net loss is included in the
financial tables accompanying this release.
Essex Rental Corp & Subsidiaries Consolidated
Statements of Operations (Amounts in thousands, except share
and per share data) (Unaudited) Three
Months Ended March 31, 2015 2014
REVENUES Equipment rentals $ 12,045 $ 11,044 Retail equipment sales
2,822 1,301 Used rental equipment sales 1,024 2,319 Retail parts
sales 1,926 2,167 Transportation 1,424 1,773 Equipment repairs and
maintenance 2,825 2,482 TOTAL REVENUES 22,066 21,086
COST OF REVENUES Salaries, payroll taxes and benefits 2,981
2,544 Depreciation 4,441 4,604 Retail equipment sales 2,601 1,150
Used rental equipment sales 753 1,919 Retail parts sales 1,566
1,742 Transportation 1,266 1,776 Equipment repairs and maintenance
2,625 2,377 Yard operating expenses 839 792 TOTAL
COST OF REVENUES 17,072 16,904 GROSS PROFIT 4,994 4,182
Selling, general and administrative expenses 6,438 5,919
Other depreciation and amortization 173 258 LOSS FROM
OPERATIONS (1,617 ) (1,995 ) OTHER INCOME (EXPENSES) Other
income 1 11 Interest expense (3,817 ) (2,972 ) Foreign currency
exchange losses (336 ) (152 ) TOTAL OTHER INCOME
(EXPENSES) (4,152 ) (3,113 ) LOSS BEFORE
INCOME TAXES (5,769 ) (5,108 ) BENEFIT FOR INCOME TAXES
(2,213 ) (1,939 ) NET LOSS $ (3,556 ) $ (3,169
) Weighted average shares outstanding: Basic 24,920,802
24,789,338 Diluted 24,920,802 24,789,338 Loss per share:
Basic $ (0.14 ) $ (0.13 ) Diluted $ (0.14 ) $ (0.13 )
Essex
Rental Corp. & Subsidiaries Utilization Statistics
(Unaudited) Three Months Ended
March 31, December 31, March 31, 2015
2014 2014 Utilization Statistics - "Days"
Utilization Crawler Cranes - Hydraulic 73.0% 74.8% 57.5% Crawler
Cranes - Traditional 26.7% 26.9% 27.5% Rough Terrain Cranes 54.1%
59.9% 58.2% Boom Trucks 46.3% 50.4% 46.1% Self-Erecting Tower
Cranes 51.4% 57.6% 44.1% City & Other Tower Cranes 56.5% 52.3%
39.1% (See definitions in the quarterly and annual reports
filed with the SEC)
Essex Rental Corp. & Subsidiaries
Segment Revenues and Gross Profit (Amounts in
thousands) (Unaudited) Three Months
Ended March 31, 2015 2014 Segment revenues
Essex Crane equipment rentals $ 7,918 $ 8,310 Coast Crane equipment
rentals 6,575 6,826 Equipment distribution 2,822 1,301 Parts and
service 4,751 4,649 Total revenues $ 22,066 $
21,086 Segment gross profit Essex Crane equipment rentals $
1,024 $ 657 Coast Crane equipment rentals 2,732 2,208 Equipment
distribution 36 10 Parts and service 1,202 1,307
Total gross profit $ 4,994 $ 4,182
Essex Rental Corp
& Subsidiaries Reconciliation of Net Loss to Adjusted
EBITDA (Amounts in thousands) (Unaudited)
Three Months Ended March 31, 2015 2014
Net loss $ (3,556 ) $ (3,169 ) Benefit for income
taxes (2,213 ) (1,939 ) Foreign currency exchange losses 336 152
Interest expense 3,817 2,972 Other income (1 ) (11 )
Loss from Operations (1,617 ) (1,995 ) Depreciation
4,441 4,604 Other depreciation and amortization 173
258 Adjusted EBITDA (1) $ 2,997 $ 2,867
(1) Includes non-cash stock compensation and non-recurring
expenses of $0.4 million and $0.5 million for the three month
periods ended March 31, 2015 and 2014, respectively.
Essex
Rental Corp. and Subsidiaries Consolidated Balance
Sheets (Amounts in thousands, except share data)
March 31, December 31, 2015
2014 (Unaudited) ASSETS CURRENT ASSETS Cash
and cash equivalents $ 688 $ 1,087 Accounts receivable, net of
allowances 17,843 16,981 Other receivables 1,624 1,700 Deferred tax
assets 3,620 3,504 Inventory Retail equipment 12,787 12,030 Retail
spare parts, net 1,749 1,725 Rental equipment, held for sale 790
790 Prepaid expenses and other assets 1,759
1,516 TOTAL CURRENT ASSETS 40,860 39,333 Rental
equipment, net 265,262 270,465 Property and equipment, net 4,667
4,613 Spare parts inventory, net 3,854 3,816 Identifiable finite
lived intangibles, net 651 735 Goodwill 1,796 1,796 Loan
acquisition costs, net 4,549 5,132
TOTAL ASSETS $ 321,639 $ 325,890
LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES
Accounts payable $ 3,994 $ 4,966 Accrued employee compensation and
benefits 1,578 2,008 Accrued taxes 3,291 3,694 Accrued interest 897
870 Accrued other expenses 1,520 1,031 Unearned rental revenue
2,035 1,849 Customer deposits 228 350 Revolving credit facilities -
short-term 144,391 142,709 Term loan - short-term 2,000 2,000
Purchase money security interest debt - short-term 1,556 1,655
Capital lease obligation - short-term 49 35
TOTAL CURRENT LIABILITIES 161,539 161,167 LONG-TERM
LIABILITIES Revolving credit facility 2,381 1,781 Term loans 64,000
64,500 Promissory notes 1,655 1,655 Purchase money security
interest debt 7,227 6,652 Deferred tax liabilities 32,365 34,487
Capital lease obligation 223 162 TOTAL
LONG-TERM LIABILITIES 107,851 109,237
TOTAL LIABILITIES 269,390 270,404 Commitments and
Contingencies STOCKHOLDERS' EQUITY Preferred stock, $.0001
par value, Authorized 1,000,000 shares, none issued - - Common
stock, $.0001 par value, Authorized 40,000,000 shares; issued and
outstanding 24,935,600 shares at March 31, 2015 and 24,824,614
shares at December 31, 2014 2 2 Paid in capital 126,772 126,510
Accumulated deficit (74,634 ) (71,077 ) Accumulated other
comprehensive income 109 51 TOTAL
STOCKHOLDERS' EQUITY 52,249 55,486
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 321,639
$ 325,890
Essex Rental Corp.Kory GlenChief Financial
Officer847-215-6522kglen@essexrental.comORPatrick MerolaManager of
Investor Relations847-215-6514pmerola@essexrental.com