Essex announces Q1 financial results
13 May 2011US crawler specialist Essex Rental Corp, owner of Essex Crane Rental, has announced its first quarter results for 2011. With utilisation rates up and revenues increasing from the same quarter last year, and new distribution agreements, it has had ‘a busy and productive’ quarter.
Higher utilisation rates were reported over the previous year, and are projected to continue, offsetting the cost of acquiring its new subsidiary Coast Crane Company.
The acquisition of Coast Crane, which generated $4.3m in this quarter, caused higher crawler crane utilisation (on a day’s method) overall, an increase from 30% to 42.8% from last year, and higher equipment rental revenue, which jumped from $5.1m this to $10.4m during the same period.
The rental rate decreased from about $17,562 to $15,516 in part because of the change in the mix of cranes being offered, weaker demand in the market and the difficulty level of obtaining commercial credit.
Essex president Ron Schad said, "The first quarter was a busy and productive period for Essex. While utilisation of crawler cranes declined slightly on a sequential quarterly basis, it significantly improved when compared to the same period in the prior year. The marginal decline in utilisation on a sequential quarterly basis is due to seasonality, the completion of stimulus-funded construction projects, and the conclusion of certain levee contracts."
Schad said that the utilisation and revenue gains justified a recent $20m Terex crane purchase for Coast Cranes: “Based on the high utilisation of certain classes of Coast Crane's equipment and the continued improvement in demand for those assets, Essex's board of directors has approved a capital investment of over $20m in new equipment for Coast Crane's rental fleet."
Reorganisation of Coast Crane’s ordering system is being implemented. Schad said, “We have already begun the process of implementing new systems at Coast Crane that will provide visibility into quote and order activity similar to what we have used very effectively at Essex Crane. In addition, we are also focused on expanding the products and services that Coast Crane currently distributes in our effort to grow both the retail sales and the repair and maintenance lines of business.
As well as building the Coast Crane business, Essex is developing its distribution contracts with manufacturers. Schad said, "During the first quarter of 2011, we were active in negotiating and executing new distribution contracts with Tadano, Manitex, Broderson, Mantis and Terex. We are excited about the promising future represented by our relationships with these industry leaders, and the strong partnerships we enjoy with all of the manufacturers that we represent."
