ESSEX RENTAL CORP. REPORTS 2010 FOURTH QUARTER AND YEAR-END RESULTS
BUFFALO GROVE, IL – March 14, 2011 – Essex Rental Corp. (Nasdaq: ESSX) ("Essex") today announced its unaudited consolidated results for the fourth quarter and year ended December 31, 2010. The results are those of Essex Rental Corp. and its wholly owned subsidiaries, including Essex Crane Rental Corp. ("Essex Crane"), Essex Finance Corp. (“Essex Finance”), Coast Crane Company (“Coast Crane”, formerly known as CC Bidding Corp.) and Coast Crane Ltd. (“Coast Crane Ltd.”). Included below is a comparison of Essex's results of operations for the quarter and year ended December 31, 2010 to the corresponding results for the quarter and year
ended December 31, 2009. Many of the explanations provided below relate to the impact of Coast Crane, which are comprised of the operations of Coast Crane and its wholly-owned subsidiary, Coast Crane Ltd. acquired on November 24, 2010. The financial tables included herein show the separate financial results of Coast Crane Company including its wholly-owned subsidiary, Coast Crane Ltd. These amounts are included in the consolidated results of operations for the fourth quarter and year-ended December 31, 2010, also included herein.
Management Comments on 2010
Ron Schad, President & CEO of Essex, stated, “The fourth quarter was an exciting and busy quarter for Essex Rental Corp. As previously announced, we completed the acquisition of Coast Crane’s assets in late November and we have been pleased with the acquisition to date. During the fourth quarter of 2010, Essex Crane experienced both increasing utilization rates and the stabilization of average rental rates.”
Mr. Schad continued, “During the fourth quarter, the cyclical upturn continued although we experienced moderate seasonal softness which is typical during the winter months. We continue to believe that we are well positioned to substantially increase utilization as we move through 2011.”
Fourth Quarter 2010 Overview
Equipment rental revenue for the fourth quarter of 2010 was $8.1 million compared to equipment rental revenue of $6.4 million for the quarter ended December 31, 2009. The increase in equipment rental revenue was related primarily due to equipment rental revenue of $1.7 million provided by Coast Crane during the five week post-acquisition period as well as an increase in utilization rates. The crawler crane utilization rate (on a days method) for the quarter ended December 31, 2010 equaled 44.7%, compared to 34.8% in the comparable period in 2009 and also improved sequentially from the 40.2% for the third quarter ended September 30, 2010. Partially offsetting the increase in equipment rental income due to the increase in utilization rates was a 19.2% decrease in the average monthly
crane rental rate to $15,493 compared to the average monthly crane rental rate of $19,181 for the comparable period in 2009. The decrease in average crane rental rate was the result of a change in the mix of cranes on rent and lower rental rate pricing due to weakened demand caused by the slower economic recovery and difficult commercial credit environment. This was compounded by the expiration of existing rental agreements executed at higher rental rates in the prior years. Excluding any impact caused by the change in mix of cranes on rent, utilization rates appear to have stabilized.
Transportation revenue for the fourth quarter of 2010 was $1.6 million compared to transportation revenue of $1.0 million for the comparable period for the quarter ended December 31, 2009. The increase in transportation revenue was primarily due to the transportation revenue provided by Coast Crane during the five week post-acquisition period of $0.1 million and an increase in the mobilization of equipment. The increase in mobilization was attributable to increased utilization and was impacted by the combination of cranes and attachments rented and the specific distances that equipment had to move for various rentals.
Equipment repairs and maintenance revenue for the fourth quarter of 2010 was $1.9 million compared to equipment repairs and maintenance revenue of $1.3 million for the comparable period ended December 31, 2009. The increase in equipment repairs and maintenance revenue was primarily due to the equipment repairs and maintenance revenue provided by Coast Crane during the five week post-acquisition period of $0.8 million, which was partially offset by a decrease in equipment repairs and maintenance revenue at Essex Crane due to a decrease in equipment repair activity.
The following information was filed by Essex Rental Corp. (ESSX) on Monday, March 14, 2011 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.