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Essex Rental Reports Higher Crane Utilization Rates: 2012 Outlook Positive

March 13, 2012, 06:45 AM
Filed Under: Corporate Earnings

Essex Rental Corp. announced its unaudited consolidated results for the fourth quarter and year ended December 31, 2011. Essex, through its subsidiaries, Essex Crane Rental Corp. and Coast Crane Company, is one of North America's largest providers of rental and distribution for mobile cranes (including lattice-boom crawler cranes, truck cranes and rough terrain cranes), self-erecting cranes, stationary tower cranes, elevators and hoists, and other lifting equipment used in a wide array of construction projects.

Fourth Quarter and Year-End 2011 Highlights

  • Crawler crane utilization increased to 39.8% for the year ended December 31, 2011 from 37.5% for the year ended December 31, 2010;
  • Average monthly crawler crane rental rates increased by $523 to $16,391 for the three month period ended December 31, 2011 from $15,868 for the quarter ended September 30, 2011. Crawler crane utilization decreased slightly over the same period from 39.5% to 38.3%;
  • For the year ended December 31, 2011, utilization on our rough terrain fleet was 62.0% validating our strategy of increasing the number of units in this segment of our rental fleet by 25.5% during the preceding 12 months;
  • Utilization rates for our self-erecting tower cranes remained relatively flat on a sequential quarter over quarter basis while utilization on larger tower cranes improved 2.5% over the same period and on certain units is approaching 60%;
  • New, used and rental equipment sales totaled $5.4 million for the three month period ended December 31, 2011, a 6.9% decrease from $5.8 million for the three month period ended September 30, 2011.

Outlook for 2012

Ron Schad, President and CEO of Essex stated, “As we noted in our third quarter earnings release, our monthly crawler crane bookings were pointing towards modest utilization improvements. This trend has accelerated somewhat. Specifically, for the five month period ended February 29, 2012, our expected revenues from signed bookings are up approximately 55.5% as compared to the same prior year period. Expected revenues are up 24.4% as compared to same period two years ago after excluding the orders of crawler cranes for levee work. Equally as important, the lease duration of bookings during the five months ended February 29, 2012 increased by over 1.8 months per order versus the five month period ended February 28, 2011. Historically, as lease duration increases, our average utilization generally improves. The number of orders that we booked during the five month period ended February 29, 2012 was the highest since the five month period ended February 29, 2008. We would expect that consistent with previous cycles, given the nature of our equipment, an increase in our bookings typically lags that of general construction equipment rental companies by 6 to 12 months. As a result of the improvement in bookings, we expect to see increasing rental revenues during 2012.”

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