He Equipment Services, Inc. (HEES) SEC Filing 10-Q Quarterly report for the period ending Sunday, September 30, 2018

Revenues increased 24.3% to $322.1 million versus $259.2 million a year ago.

Net income was $21.3 million in the third quarter compared to net income of $8.5 million and adjusted net income of $27.1 million a year ago.¹ The effective income tax rate was 26.4% in the third quarter of 2018 and (11.7)% in the third quarter of 2017.

Adjusted EBITDA increased 22.2% to $108.2 million in the third quarter compared to $88.5 million a year ago, yielding a margin of 33.6% of revenues compared to 34.2% a year ago.

Rental revenues increased 24.2% to $156.0 million in the third quarter compared to $125.6 million a year ago.

New equipment sales increased 39.4% to $68.2 million in the third quarter compared to $48.9 million a year ago.

Used equipment sales increased 36.2% to $30.3 million in the third quarter compared to $22.3 million a year ago.

Gross margin was 35.6% compared to 36.3% a year ago. The decrease in gross margin was primarily a result of a shift in revenue mix to lower margin new equipment sales revenue.

In the third quarter of 2017, the Company completed its offering of new 8-year 5.625% senior unsecured notes and the repurchase and redemption of its previously outstanding 7% senior unsecured notes. The Company’s operating results for the third quarter of 2017 include a $25.4 million non-recurring item associated with the premiums paid to repurchase and redeem the old notes and the write-off of unamortized note discount and deferred transaction costs associated therewith and $8.7 million of income, net of merger costs, resulting from the termination of our merger agreement with Neff Corporation.