Herc’s growth story continues, with no end in sight.
On Thursday, Herc Holdings, the Bonita Springs-based parent company of Herc Rentals, reported another solid quarter, driven by growth — both organically and through acquisitions.
In the second quarter, the equipment rental business again generated record revenues and profits.
Equipment rental revenue increased by more than 35% to reach $605.4 million.
Total revenue reached $640.4 million, compared to $490.9 million a year ago.
Meanwhile, earnings — or earnings — rose double digits to $72.2 million, or $2.38 per share, from $47.1 million, or $1.55 per share, in 2021 .
Adjusted earnings, excluding one-time gains and losses, were $74.8 million, or $2.47 per share, compared to $47.6 million, or $1.57 per share, last year .
The company continued to see robust demand and higher prices for its rental equipment across its geographic footprint, in both its core and specialty businesses, said Larry Silber, the company’s president and chief executive officer, during a conference call with analysts.
Prices rose 5.5% over the year, reflecting both strong demand and a limited supply of equipment.
Looking ahead, Silber said he sees no signs of slowing down, despite the pressures of the recession.
In fact, the future looks particularly bright, with $550 billion in federal projects planned over the next five years on roads, bridges and other infrastructure, from which Herc expects to benefit greatly.
“We intend to get our fair share from this new business,” Silber said.
Herc’s rental equipment includes everything from earth-moving machinery, such as bulldozers and backhoes, to power tools, from drills to nail guns. Thus, his clients include commercial and residential construction contractors, both of which have been strong.
Acquisitions have been – and remain – a big part of Herc’s growth strategy.
In the second quarter alone, the company made six acquisitions, with a total of nine locations. That included All-Star Rents, a deal that gave Herc “a long-sought Naples branch and team,” Paul Dickard, the company’s vice president of communications, said in an email.
“Obviously, the other locations and team members we have acquired are great new additions to our Florida branch network, but we are happy to finally say that we have a Naples branch in the fold,” did he declare.
This location is at 6167 Taylor Road.
This year, Herc acquired a total of nine businesses with 12 locations, while opening 10 new “virgin locations,” or locations on sites that were not previously used for equipment rentals.
The company isn’t just growing its footprint.
Herc also continues to invest in its fleet, as part of its “stepping up” growth strategy. The average value of its fleet increased 32% in the second quarter, to more than $5 billion (based on historical cost).
The company continues to gain market share in North America, which Silber attributes to many factors, including its focus on providing exceptional customer service and the strength of its team of employees across the country.
On the call with analysts, Aaron Birnbaum, chief operating officer of Herc, said the company continues to see steady demand for its rental equipment and exciting opportunities for growth in its key urban markets.
“We see no reason to slow our momentum. Obviously there is more to come,” he said.
Along with its earnings, Herc announced plans to buy back shares, in an effort to increase the value of its shares, which Silber described as “discounted from our long-term growth expectations.”
The company also raised its financial forecast for the year. It now expects adjusted earnings (before interest, tax, depreciation and amortization) to be between $1.195 billion and $1.245 billion. That would be a 34-39% increase over last year.
Herc has 333 locations in North America and has approximately 6,100 employees.
About 400 of these employees work for the company’s local headquarters.