United Rentals, Greenwich, Conn., recently announced financial results for the fourth quarter and full year ended Dec. 31, 1999. The company reported fourth-quarter revenues of $669 million, a 61 percent increase over the $416 million reported for the fourth quarter of 1998. Of this increase, 18.1 percent represented same-store growth.
Rental revenues were 70.1 percent of total revenues, sales of rental equipment were 11.3 percent, and sales of equipment and merchandise and other revenues were 18.6 percent.
Net income for the quarter was $44.3 million, an 80 percent increase compared to the same period last year. Diluted earnings per share for the fourth quarter of 1999 were $0.48, a 45 percent increase over the $0.33 reported in last year's fourth quarter. Results for the fourth quarter of 1998 exclude charges of $0.09 per diluted share primarily related to the company's mergers with U.S. Rentals and Rental Tools and Equipment, which were completed in September 1998.
Revenues for the full year ended Dec. 31, 1999, were $2.23 billion, an 83 percent increase compared to the previous year. Of this increase, 21.2 percent represented same-store growth. Rental revenues were 70.8 percent of total revenues, sales of rental equipment were 10.6 percent, and sales of equipment and merchandise and other revenues were 18.6 percent.
Net income was $153.4 million, a 111 percent increase from the previous year. Earnings per share were $1.65 per diluted share, a 65 percent increase compared to results reported for the full year ended Dec. 31, 1998. Results for 1999 exclude charges of $0.12 per diluted share that reflect expenses incurred by the company in the second quarter related to its terminated tender offer for Rental Service Corp. Results for 1998 exclude charges of $0.82 per diluted share that are primarily related to the U.S. Rentals and Rental Tools mergers.
The company also has acquired 15 companies with 48 locations and combined annual revenues of about $100 million. Of these, four companies with 17 locations and about $50 million of combined annual revenues were acquired since Jan. 1.
"These strong results reflect continuing favorable industry trends, increased operating efficiencies and our ongoing acquisition program," said Bradley Jacobs, chairman and chief executive officer. "Equipment utilization rose to 63.5 percent in the fourth quarter, driven in part by increased sharing of equipment among our branches. Sharing of equipment generated 10.1 percent of our fourth-quarter rental revenues.
"We continued to consolidate our vendor base, resulting in a 10 percent to 20 percent reduction in our purchase costs for many types of equipment. We intend to secure similar discounts for other equipment in our rental fleet and for other goods and services we buy. Our goal is to realize annual cash savings of approximately $150 million from these purchasing initiatives.
"Earlier this month, we launched an enhanced business-to-business Web site to move the company solidly into e-commerce. Key features of the site include the United Rentals E-Rental Store, where our customers can rent or buy equipment online at any time, and the URdata application that gives customers instant access to their account activity. We expect that the Internet will emerge as an increasingly important channel for existing and new customers.
"We anticipate significant growth in the year 2000 from fleet expansion at existing locations, national account initiatives, increased operating efficiencies and greater cost savings."
United Rentals' 702 locations are located in 45 states, six Canadian provinces and Mexico.
The Hertz Equipment Rental Corp. (HERC), Park Ridge, N.J., recently acquired AA Rentals, Seattle. The company has 21 locations. Net revenues for the fiscal year ending Oct. 31, 1999, were $25 million.
No price was disclosed for the cash-for-stock transaction.
The 21 locations will operate under the name Hertz AA Rentals.
"This acquisition strategically positions HERC in a new business segment in the Seattle/Puget Sound area in the light commercial contract and homeowner market," says Gerald Plescia, HERC president. "Furthermore, it provides the opportunity to service a new base of customers by providing a traditional line of equipment with a new geographic reach."
Hertz' equipment rental unit operates from more than 325 locations in North America and Europe.
Rental Service Corp. (RSC), Scottsdale, Ariz., recently acquired Tri-Rental Sales & Services, Derby, Kan.; Eagle Equipment Rental & Supply, Roots-town, Ohio; P.C. Rentals d/b/a Collins Rentals, Kirksville, Mo.; Rental Center, Florissant, Mo.; Tractors, Ardmore, Okla.; and Four Seasons Rental & Sales, Prescott, Ariz. These six acquired companies operated a combined 10 locations in Arizona, Kansas, Missouri, Ohio and Oklahoma and had total combined trailing 12-month revenues of about $6.9 million.
RSC operates in 30 states in the United States and Canada.