He Equipment Services, Inc. (HEES) SEC Filing 10-Q Quarterly report for the period ending Tuesday, March 31, 2020

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Revenues decreased 8.8% to $285.9 million versus $313.6 million a year ago.

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Included in the first quarter 2020 net loss was a $62.0 million pre-tax non-cash goodwill impairment charge.  Net loss was $37.0 million in the first quarter compared to net income of $14.2 million a year ago.  The effective income tax rate was 21.9% in the first quarter of 2020 and 26.4% in the first quarter of 2019.  Excluding the impairment charge, net income was $10.8 million in the first quarter compared to net income of $14.2 million a year ago.  Excluding the impairment charge, the effective income tax rate was 26.2% in the first quarter of 2020 and 26.4% in the first quarter of 2019.

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Adjusted EBITDA decreased 1.7% to $99.2 million in the first quarter compared to $100.9 million a year ago, yielding a margin of 34.7% of revenues compared to 32.2% a year ago.  

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Total equipment rental revenues for the first quarter of 2020 were $174.5 million, a decrease of $1.6 million, or 0.9%, compared to $176.1 million a year ago. Rental revenues for the first quarter of 2020 were $158.6 million, a decrease of approximately $1.0 million, or 0.7%, compared to $159.7 million in the first quarter of 2019.

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New equipment sales decreased 47.8% to $30.9 million in the first quarter compared to $59.1 million a year ago.

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Used equipment sales increased 5.3% to $31.2 million in the first quarter compared to $29.6 million a year ago.

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Gross margin was 36.9% compared to 36.3% a year ago.  The increase in gross margin was largely the result of a shift in revenue mix to rentals.

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Total equipment rental gross margins were 41.3% in the first quarter of 2020 compared to 44.3% a year ago.  Rental gross margins were 46.1% in the first quarter of 2020 compared to 48.7% last year.  The decrease was primarily due to lower time utilization.