The results announced compared Essex Rental Corp, and its Essex Crane Rental Corp operating subsidiary to predecessor company Essex Crane. Total revenue for the first quarter of 2009 was USD15m, compared to USD17.2m for Essex Crane in the first quarter of 2008. Rental revenue in the three months to 31 March 2009 was USD12.2m, compared to USD13.9m last year.

Speaking to analysts after the results were announced, Schad said, “During the first quarter of 2009 we experienced a slowdown in business activity. We believe that the softness in our results was not caused by any fundamental competitive shifts or a flaw in our long-term business strategy to focus on heavier lift capacity equipment.

“Instead, we believe that the slowdown that we have experienced is a result of current weakness in the overall infrastructure and construction markets, due in large part to uncertainty on the part of our private customers as to the direction of their own businesses and the credit markets. Specifically, we are experiencing a number of project start ups that by their nature cannot be permanently cancelled, but instead are being delayed to a later date.”

Schad cited the example of a petro-chemical customer that has put off a mandatory environmental compliance project, due to be complete by 2011, off for one year. Outside of the private sector, Essex is hoping its big cranes will find work on the US’s much-needed infrastructure development programme.

However, the start of the federally funded programme, paid for through this year’s American Recovery and Reinvestment Act, is still some time away. Schad said, “Much of the money for these infrastructure initiatives is only now being appropriated to discreet projects. We are several months away from the kick-off of these projects.

“The Act has allocated approximately USD50bn in funding for transportation related projects ,of which a significant portion will be for a large bridge construction that will demand the use of crawler cranes. As recently as last week, the Army Corps of Engineers released a listing of projects to be funded by the American Recovery and Reinvestment Act.

“In addition, approximately USD4.6bn was appropriated to the Corps for Civil Works projects. At this point in time, approximately 90% of the specified and approved projects are in the planning stages, which we anticipate will result in an increase in the level of firm orders placed for crawler cranes later this year.”

Essex Crane’s strategy over recent years has been to focus on heavier crawlers, by investing in new equipment and disposing of lower capacity models. CFO Marty Kroll said, “Cranes with capacity over 175 US t represents 85% of the orderly liquidation value of our entire fleet and generate well in excess of a majority of our profits as they tend to rent for much higher rates.

“For the first quarter of 2009, the monthly average rental rate increased 18.9 percent to $22,794 from $19,163 in the first quarter of 2008. On a days’ method for the quarter ended March 31, 2009, the total number of actual crane rental days was 57.2 percent down from 72.6 percent in the same period last year. While our overall utilization rate is down materially in the quarter, it is important to note that our utilization rate for our heavier lifting equipment, which generates the majority of our cash flow, continued to be strong.”

Responding to a question from Oppenheimer analyst Jim Giannakouros, Schad said, “Part of our strategy is go to the larger cranes, there’s just less of those in the market place so it’s not as disruptive of a market place in times like this than if we were faced with a fleet of all smaller cranes where there is many more local competitors.

“It has been always been our strategy to not be a price leader in a declining market so we’re using our sales force and our lead generation data base to look specifically for jobs that are not necessarily as price sensitive where we’re better positioned with maybe a unique attachment that does the job better, equipment location where we have lower transportation cost than some of the competitors and go hard after those jobs with that strategy rather than you know allowing the rental rate reductions.”