Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 19, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | HEES | |
Entity Registrant Name | H&E Equipment Services, Inc. | |
Entity Central Index Key | 0001339605 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 36,449,926 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 000-51759 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 81-0553291 | |
Entity Address, Address Line One | 7500 Pecue Lane | |
Entity Address, City or Town | Baton Rouge | |
Entity Address, State or Province | LA | |
Entity Address, Postal Zip Code | 70809 | |
City Area Code | 225 | |
Local Phone Number | 298-5200 | |
Document Transition Report | false | |
Document Quarterly Report | true |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
ASSETS | |||
Cash and cash equivalents | $ 6,919 | $ 81,330 | |
Receivables, net of allowance for doubtful accounts of $6,507 and $6,637, respectively | 253,326 | 225,294 | |
Inventories, net of reserves for obsolescence of $35 and $54, respectively | 137,017 | 107,842 | |
Prepaid expenses and other assets | 13,348 | 21,455 | |
Rental equipment, net of accumulated depreciation of $970,906 and $884,740, respectively | 1,705,367 | 1,418,951 | |
Property and equipment, net of accumulated depreciation and amortization of $193,355 and $177,017, respectively | 163,531 | 134,637 | |
Operating lease right-of-use assets, net of accumulated amortization of $65,631 and $51,419, respectively | 177,301 | 164,566 | |
Finance lease right-of-use assets, net of accumulated amortization of $259 and $105, respectively | 2,978 | 1,545 | |
Deferred financing costs, net of accumulated amortization of $17,324 and $16,518, respectively | 4,891 | 758 | |
Intangible assets, net of accumulated amortization of $24,417 and $19,369, respectively | 27,583 | 32,631 | |
Goodwill | [1] | 96,873 | 102,690 |
Total assets | 2,589,134 | 2,291,699 | |
Liabilities: | |||
Senior secured credit facility | 142,234 | ||
Accounts payable | 121,126 | 129,482 | |
Manufacturer flooring plans payable | 2,657 | 422 | |
Accrued expenses payable and other liabilities | 98,334 | 77,142 | |
Dividends payable | 291 | 377 | |
Senior unsecured notes, net of unaccreted discount of $6,100 and $6,979 and deferred financing costs of $1,409 and $1,612, respectively | 1,242,491 | 1,241,409 | |
Operating lease liabilities | 184,240 | 169,069 | |
Finance lease liabilities | 3,079 | 1,594 | |
Deferred income taxes | 306,548 | 271,162 | |
Total liabilities | 2,101,000 | 1,890,657 | |
Commitments and Contingencies | |||
Stockholders' equity: | |||
Preferred stock, $0.01 par value, 25,000,000 shares authorized; no shares issued | |||
Common stock, $0.01 par value, 175,000,000 shares authorized; 40,824,586 and 40,567,876 shares issued at September 30, 2023 and December 31, 2022, respectively, and 36,450,399 and 36,309,321 shares outstanding at September 30, 2023 and December 31, 2022, respectively | 408 | 405 | |
Additional paid-in capital | 259,205 | 251,901 | |
Treasury stock at cost, 4,374,187 and 4,258,555 shares of common stock held at September 30, 2023 and December 31, 2022, respectively | (76,017) | (69,964) | |
Retained earnings | 304,538 | 218,700 | |
Total stockholders’ equity | 488,134 | 401,042 | |
Total liabilities and stockholders’ equity | $ 2,589,134 | $ 2,291,699 | |
[1] The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables | $ 6,507 | $ 6,637 |
Reserves for obsolescence inventories | 35 | 54 |
Accumulated depreciation, rental equipment | 970,906 | 884,740 |
Accumulated depreciation and amortization, property and equipment | 193,355 | 177,017 |
Accumulated amortization, operating lease right-of-use assets | 65,631 | 51,419 |
Accumulated amortization, financing lease right-of-use assets | 259 | 105 |
Accumulated amortization, deferred financing costs | 17,324 | 16,518 |
Accumulated amortization, intangible assets | 24,417 | 19,369 |
Unaccreted discount, net | 6,100 | 6,979 |
Deferred financing costs | $ 1,409 | $ 1,612 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 175,000,000 | 175,000,000 |
Common stock, shares issued | 40,824,586 | 40,567,876 |
Common stock, shares outstanding | 36,450,399 | 36,309,321 |
Treasury stock, shares | 4,374,187 | 4,258,555 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | ||
Revenues: | |||||
Revenues | $ 400,696 | $ 324,280 | $ 1,083,410 | $ 891,401 | |
Cost of revenues: | |||||
Cost of revenues | 212,313 | 172,397 | 585,288 | 495,604 | |
Gross profit | 188,383 | 151,883 | 498,122 | 395,797 | |
Selling, general and administrative expenses | 104,218 | 88,418 | 298,812 | 249,360 | |
Impairment of goodwill | (5,714) | (5,714) | [1] | ||
Gain on sales of property and equipment, net | 763 | 529 | 1,866 | 2,911 | |
Income (loss) from operations | 79,214 | 63,994 | 195,462 | 149,348 | |
Other income (expense): | |||||
Interest expense | (16,145) | (13,548) | (44,542) | (40,495) | |
Other, net | 3,071 | 883 | 5,851 | 2,656 | |
Total other expense, net | (13,074) | (12,665) | (38,691) | (37,839) | |
Income (loss) from operations before provision (benefit) for income taxes | 66,140 | 51,329 | 156,771 | 111,509 | |
Provision (benefit) for income taxes | 17,261 | 12,953 | 41,002 | 28,967 | |
Net income from continuing operations | 48,879 | 38,376 | 115,769 | 82,542 | |
Discontinued Operations: | |||||
Loss from discontinued operations before benefit from income taxes | (2,049) | ||||
Benefit from income taxes | (525) | ||||
Net loss from discontinued operations | (1,524) | ||||
Net income | $ 48,879 | $ 38,376 | $ 115,769 | $ 81,018 | |
Net income from continuing operations per common share: | |||||
Basic | $ 1.35 | $ 1.05 | $ 3.21 | $ 2.27 | |
Diluted | 1.35 | 1.05 | 3.19 | 2.26 | |
Net loss from discontinued operations per common share: | |||||
Basic | (0.04) | ||||
Diluted | (0.04) | ||||
Net income per common share: | |||||
Basic | 1.35 | 1.05 | 3.21 | 2.23 | |
Diluted | $ 1.35 | $ 1.05 | $ 3.19 | $ 2.22 | |
Weighted average common shares outstanding: | |||||
Basic | 36,134 | 36,462 | 36,078 | 36,402 | |
Diluted | 36,322 | 36,553 | 36,326 | 36,544 | |
Dividends declared per common share outstanding | $ 0.275 | $ 0.275 | $ 0.825 | $ 0.825 | |
Equipment Rentals [Member] | |||||
Revenues: | |||||
Revenues | $ 315,811 | $ 253,564 | $ 869,278 | $ 680,366 | |
Cost of revenues: | |||||
Cost of revenues | 165,962 | 125,484 | 468,696 | 352,153 | |
Equipment Rentals [Member] | Rentals Other [Member] | |||||
Cost of revenues: | |||||
Cost of revenues | 35,056 | 25,989 | 93,381 | 70,775 | |
Equipment Rentals [Member] | Rental Depreciation [Member] | |||||
Cost of revenues: | |||||
Cost of revenues | 90,361 | 65,952 | 258,146 | 188,261 | |
Equipment Rentals [Member] | Rental Expense [Member] | |||||
Cost of revenues: | |||||
Cost of revenues | 40,545 | 33,543 | 117,169 | 93,117 | |
Used Equipment Sales [Member] | |||||
Revenues: | |||||
Revenues | 52,708 | 20,300 | 124,476 | 60,659 | |
Cost of revenues: | |||||
Cost of revenues | 21,893 | 9,396 | 51,396 | 31,815 | |
New Equipment Sales [Member] | |||||
Revenues: | |||||
Revenues | 12,633 | 23,491 | 29,308 | 71,013 | |
Cost of revenues: | |||||
Cost of revenues | 10,962 | 20,249 | 25,278 | 60,849 | |
Parts Sales [Member] | |||||
Revenues: | |||||
Revenues | 11,897 | 16,745 | 36,082 | 48,976 | |
Cost of revenues: | |||||
Cost of revenues | 8,620 | 11,881 | 25,736 | 35,417 | |
Services Revenues [Member] | |||||
Revenues: | |||||
Revenues | 6,739 | 8,610 | 21,058 | 25,633 | |
Cost of revenues: | |||||
Cost of revenues | 2,742 | 3,165 | 8,030 | 9,122 | |
Other [Member] | |||||
Revenues: | |||||
Revenues | 908 | 1,570 | 3,208 | 4,754 | |
Cost of revenues: | |||||
Cost of revenues | $ 2,134 | $ 2,222 | $ 6,152 | $ 6,248 | |
[1] Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Cash flows from operating activities: | |||||
Net income | $ 115,769 | $ 81,018 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | |||||
Depreciation and amortization of property and equipment | 25,329 | 20,889 | |||
Depreciation of rental equipment | 258,146 | 188,261 | |||
Amortization of finance lease right-of-use assets | 154 | 64 | |||
Amortization of intangible assets | 5,048 | 2,978 | |||
Amortization of deferred financing costs | 1,009 | 728 | |||
Accretion of note discount, net of premium amortization | 879 | 879 | |||
Non-cash operating lease expense | 14,212 | 10,503 | |||
Provision for losses on accounts receivable | 3,382 | 2,289 | |||
Provision for inventory obsolescence | 6 | 32 | |||
Change in deferred income taxes | 35,386 | 24,402 | |||
Stock-based compensation expense | 7,304 | 4,915 | |||
Impairment of goodwill | $ 5,714 | 5,714 | [1] | ||
Loss on sale of discontinued operations | 1,917 | ||||
Gain from sales of property and equipment, net | (1,866) | (2,911) | |||
Gain from sales of rental equipment, net | (72,856) | (28,126) | |||
Changes in operating assets and liabilities: | |||||
Receivables | (32,201) | (47,827) | |||
Inventories | (101,771) | (84,518) | |||
Prepaid expenses and other assets | 8,107 | (240) | |||
Accounts payable | (8,351) | 26,315 | |||
Manufacturer flooring plans payable | 2,235 | (4,300) | |||
Accrued expenses payable and other liabilities | 10,867 | 13,934 | |||
Net cash provided by (used in) operating activities | 276,502 | 211,202 | |||
Cash flows from investing activities: | |||||
Closing adjustment on sale of discontinued operations | (2,256) | ||||
Purchases of property and equipment | (55,412) | (36,327) | |||
Purchases of rental equipment | (522,596) | (337,156) | |||
Proceeds from sales of property and equipment | 2,492 | 3,561 | |||
Proceeds from sales of rental equipment | 123,480 | 55,692 | |||
Net cash used in investing activities | (452,036) | (316,486) | |||
Cash flows from financing activities: | |||||
Borrowings on senior secured credit facility | 1,332,449 | 895,845 | |||
Payments on senior secured credit facility | (1,190,215) | (895,845) | |||
Dividends paid | (30,017) | (29,871) | |||
Purchases of treasury stock | (6,053) | (1,631) | |||
Payments of deferred financing costs | (4,939) | ||||
Payments of finance lease obligations | (102) | (31) | |||
Net cash provided by (used in) financing activities | 101,123 | (31,533) | |||
Net decrease in cash and cash equivalents | (74,411) | (136,817) | |||
Cash and cash equivalents, beginning of period | 81,330 | 357,296 | $ 357,296 | ||
Cash and cash equivalents, end of period | $ 6,919 | 6,919 | 220,479 | $ 81,330 | |
Noncash asset purchases: | |||||
Assets transferred from used and new inventory to rental fleet | 72,590 | 42,338 | |||
Purchases of property and equipment included in accrued expenses payable and other liabilities | 563 | (2,567) | |||
Operating lease assets obtained in exchange for new operating lease liabilities | 26,946 | 18,114 | |||
Cash paid during the period for: | |||||
Interest | 29,131 | 26,729 | |||
Income taxes paid, net of refunds received | $ 4,812 | $ 2,550 | |||
[1] Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. |
Organization and Nature of Oper
Organization and Nature of Operations | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Operations | (1) Organization and Nature of Operations Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of H&E Equipment Services, Inc. and its wholly-owned subsidiaries H&E Finance Corp., GNE Investments, Inc., Great Northern Equipment, Inc., H&E California Holding, Inc., H&E Equipment Services (California), LLC, H&E Equipment Services (Midwest), Inc. and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we”, “us”, “our” or the “Company.” The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, and therefore, the results and trends in these interim condensed consolidated financial statements may not be the same for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2022, from which the consolidated balance sheet amounts as of December 31, 2022 were derived. All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. On October 1, 2021, the Company sold its crane business (the “Crane Sale”) and during June 2022, closing adjustments were finalized. The results of operations of the Crane Sale are reported in discontinued operations in the Condensed Consolidated Statements of Income for the 2022 period presented. All results and information in the consolidated financial statements are presented as continuing operations and exclude the Crane Sale unless otherwise noted specifically as discontinued operations. The Condensed Consolidated Statements of Cash Flows include cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3 “Acquisitions and Dispositions”. For additional information, refer to Note 3. The nature of our business is such that short-term obligations are typically met by cash flows generated from long-term assets. Consequently, the accompanying condensed consolidated balance sheets are presented on an unclassified basis. Nature of Operations Founded in 1961, H&E Equipment Services, Inc. is one of the largest rental equipment companies in the nation, serving customers at our 131 branch locations across 30 states. The Company’s fleet is comprised of aerial work platforms, earthmoving, material handling, and other general and specialty lines. H&E serves a diverse set of end markets in many high-growth geographies including branches throughout the Pacific Northwest, West Coast, Intermountain, Southwest, Gulf Coast, Southeast, Midwest and Mid-Atlantic regions. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | (2) Significant Accounting Policies We describe our significant accounting policies in Note 2 of the notes to Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022. During the three and nine months ended September 30, 2023, there were no significant changes to those accounting policies. Cash and Cash Equivalents Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less. Use of Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our condensed consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates. Reclassifications Certain reclassifications have been made to prior period amounts in the Condensed Consolidated Statements of Income to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts. Revenue Recognition We recognize revenue in accordance with two different Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) standards: 1) Topic 606 and 2) Topic 842. Under Topic 606, Revenue from Contracts with Customers, revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Under Topic 842, Leases, we account for equipment rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. In the table below, revenues as presented in our condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 are summarized by type and by the applicable accounting standard. Three Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 271,019 $ 132 $ 271,151 $ 215,599 $ 86 $ 215,685 Re-rent revenue 9,106 — 9,106 8,441 — 8,441 Ancillary and other rental revenues: Delivery and pick-up — 19,090 19,090 — 15,646 15,646 Other 16,464 — 16,464 13,792 — 13,792 Total ancillary rental revenues 16,464 19,090 35,554 13,792 15,646 29,438 Total equipment rental revenues 296,589 19,222 315,811 237,832 15,732 253,564 Used equipment sales — 52,708 52,708 — 20,300 20,300 New equipment sales — 12,633 12,633 — 23,491 23,491 Parts sales — 11,897 11,897 — 16,745 16,745 Service revenues — 6,739 6,739 — 8,610 8,610 Other — 908 908 — 1,570 1,570 Total revenues $ 296,589 $ 104,107 $ 400,696 $ 237,832 $ 86,448 $ 324,280 Nine Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 745,317 $ 382 $ 745,699 $ 580,032 $ 272 $ 580,304 Re-rent revenue 25,357 — 25,357 22,247 — 22,247 Ancillary and other rental revenues: Delivery and pick-up — 52,255 52,255 — 40,645 40,645 Other 45,967 — 45,967 37,170 — 37,170 Total ancillary rental revenues 45,967 52,255 98,222 37,170 40,645 77,815 Total equipment rental revenues 816,641 52,637 869,278 639,449 40,917 680,366 Used equipment sales — 124,476 124,476 — 60,659 60,659 New equipment sales — 29,308 29,308 — 71,013 71,013 Parts sales — 36,082 36,082 — 48,976 48,976 Service revenues — 21,058 21,058 — 25,633 25,633 Other — 3,208 3,208 — 4,754 4,754 Total revenues $ 816,641 $ 266,769 $ 1,083,410 $ 639,449 $ 251,952 $ 891,401 Revenues by reporting segment are presented in Note 11 of our Condensed Consolidated Financial Statements, using the revenue captions reflected in our Consolidated Statements of Income. We believe that the disaggregation of our revenues from contracts to customers as reflected above, coupled with further discussion below and the reporting segments in Note 11, depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. For further information related to our accounting for revenues pursuant to Topic 606 and Topic 842, see Significant Accounting Policies in Note 2 to our Annual Report on Form 10-K for the year ended December 31, 2022. Receivables and contract assets and liabilities We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowance for doubtful accounts address our total revenues from Topic 606 and Topic 842. We believe concentration of credit risk with respect to our receivables is limited because our customer base is comprised of a large number of geographically diverse customers. No single customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented in this Quarterly Report on Form 10-Q. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Pursuant to Topic 842 and Topic 326 for rental and non-rental receivables, respectively, we maintain an allowance for doubtful accounts that reflects our estimate of our expected credit losses. Our allowance is estimated using a loss rate model based on delinquency. The estimated loss rate is based on our historical experience with specific customers, our understanding of our current economic circumstances, reasonable and supportable forecasts, and our own judgment as to the likelihood of ultimate payment based upon available data. Our largest exposure to doubtful accounts is our rental operations, which as discussed above is accounted for under Topic 842 and as of September 30, 2023 represents 80.2 % of our total revenues and an approximate corresponding percentage of our receivables, net and associated allowance for doubtful accounts. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance for doubtful accounts. Bad debt expense as a percentage of total revenues for both the nine months ended September 30, 2023 and 2022 were approximately 0.3 %. We do not have material contract assets, impairment losses associated therewith, or material contract liabilities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenues during the three months ended September 30, 2023 and 2022 that was included in the contract liability balance as of the beginning of such periods. Goodwill Goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment at least annually, as of October 1, or more frequently if triggering events occur or other impairment indicators arise that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e., before aggregation or combination), or one level below an operating segment (i.e., a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. We have identified that our five operating segments (Equipment Rentals, Used Equipment Sales, New Equipment Sales, Parts Sales and Service Revenues) each represent a reporting unit. Topic 350 consists of a one-step assessment to determine whether goodwill is impaired requiring an entity to compare each reporting unit’s carrying value, including goodwill, with its fair value. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. An entity also has an option to perform a qualitative assessment to determine if the quantitative impairment test is necessary. Considerable judgment is required by management in performing the qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Based on our evaluation of our Parts Sales reporting unit and operating segment during the third quarter of 2023, we identified a triggering event requiring an interim impairment test. This triggering event related to a sustained parts segment decline in volume and actual revenue and earnings compared with our planned revenue and earnings utilized in our most recent quantitative goodwill impairment analysis following our business’s dispositions and strategic shift to be rental focused. Additional information on our dispositions is included in Footnote 3. No triggering event was identified related to our Equipment Rental and Used Equipment Sales reporting units. We estimated the fair value of our Parts Sales reporting unit by weighting results from the income approach and the market approach and concluded that our Parts Sales reporting unit had a fair value less than its carrying value, resulting in a $ 5.7 million impairment charge. The impairment was largely due to a current year decrease in parts revenues as a result of our business’s strategic shift and recent dispositions. This revenue decline, combined with our forecasted parts revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value. Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, such as the timing and duration of economic expansion or contraction cycles in our business, interest rates, and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. An adverse change in any of the assumptions used in our impairment testing (e.g., projected revenue and profit, discount rates, industry price multiples, etc.) could affect our fair value measurements and result in future impairments. If we are unable to achieve the financial forecasts used in our impairment analysis, we may also be required to record an impairment charge to our goodwill. The impairment charge described above is a non-cash item and does not affect our cash flows, liquidity or borrowing capacity under the Credit Facility, and the impairment charge is excluded from our financial results in evaluating our financial covenants under the Credit Facility. The change to the carrying amount of goodwill for the period ended September 30, 2023 is as follows (amounts in thousands): Equipment Rentals Used Eq. Sales New Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2021 (1) $ 48,976 $ 8,447 $ — $ 5,714 $ — $ 63,137 Increase (2) 39,553 — — — — 39,553 Balance at December 31, 2022 (1) 88,529 8,447 — 5,714 — 102,690 Increase (3) 29 — — — — 29 Decrease (4) — — — ( 5,714 ) — ( 5,714 ) Decrease (5) ( 132 ) — — — — ( 132 ) Balance at September, 2023 (1) $ 88,426 $ 8,447 $ — $ — $ — $ 96,873 (1) The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. (2) Increase due to the One Source Equipment Rentals, Inc. (“OSR”) Acquisition. (3) Increase is related to the closing adjustments of the OSR Acquisition during the first quarter of 2023. (4) Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. (5) Decrease is related to the final closing adjustment of the OSR Acquisition during the third quarter of 2023. Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements On January 1, 2023 we adopted Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provided optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. Our exposure related to the expected cessation of LIBOR was limited to the interest expense and certain fees we incur on balances outstanding under our Senior Secured Credit Facility (the “Credit Facility”). We amended and restated our Credit Facility to transition to Secured Overnight Financing Rate (“SOFR”) as of February 2, 2023. The impact from the cessation of LIBOR as a reference rate did no t have a material impact on our consolidated financial statements. |
Acquisitions and Dispositions
Acquisitions and Dispositions | 9 Months Ended |
Sep. 30, 2023 | |
Acquisitions and Dispositions [Abstract] | |
Acquisitions and Dispositions | (3) Acquisitions and Dispositions 2022 Acquisition One Source Equipment Rentals, Inc. Effective October 1, 2022 , we acquired 100 % of the equity of One Source Equipment Rentals, Inc. (“OSR”), an equipment rental company with ten branches located in the Midwest. The acquisition expands our presence in the surrounding market, including initial locations in Illinois, Indiana, and Kentucky. The aggregate cash consideration paid was approximately $ 136.7 million. The acquisition and related fees and expenses were funded from available cash. Customary closing adjustments were finalized during the first quarter of 2023 and the update of a tax estimate upon filing the final tax returns concluded during the third quarter of 2023. The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. $'s in thousands Cash $ 337 Accounts receivable 10,406 Inventory 332 Prepaid expenses and other assets 374 Rental equipment 102,436 Property and equipment 4,216 Operating lease right-of-use assets 2,388 Intangible assets (1) 12,300 Total identifiable assets acquired 132,789 Accounts payable ( 4,723 ) Tax payable ( 786 ) Operating lease liabilities ( 2,388 ) Deferred income taxes ( 27,653 ) Total liabilities assumed ( 35,550 ) Net identifiable assets acquired 97,239 Goodwill (2) 39,451 Net assets acquired $ 136,690 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value Life (years) Customer relationships $ 10,600 10 Noncompetition agreements 1,700 1 $ 12,300 (2) The acquired goodwill has been allocated to the equipment rentals reporting unit. Included in the total goodwill amount of $ 39.5 million is approximately $ 0.8 million of accrued purchase price consideration to be paid to the sellers pursuant to the terms of the purchase agreement among the parties named thereto. The level of goodwill that resulted from the OSR acquisition is primarily reflective of OSR’s going-concern value, the value of assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. Total acquisition costs were $ 0.8 million and included within selling, general and administrative ( “SG&A”) expenses on the Consolidated Statement of Operations during the year ended December 31, 2022. Since our acquisition of OSR on October 1, 2022, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired locations, and it is impractical to reasonably estimate the amount of OSR revenues and earnings since the acquisition date. The assets and liabilities were recorded as of October 1, 2022 and the results of operations are included in the Company's consolidated results as of that date. Pro forma financial information (unaudited) We completed the OSR acquisition effective October 1, 2022. Therefore, our reported Condensed Consolidated Statement of Income for the quarter ended September, 2022 does not include OSR. The pro forma information for the three and nine months ended September 30, 2022 in the table below (amounts in thousands) are for informational purposes only and gives effect to the OSR acquisition as if it had been completed on January 1, 2022 (the “pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisition been completed on the pro forma acquisition date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, nor does it reflect additional revenue opportunities following the acquisition. The unaudited pro forma financial information includes adjustments primarily related to the incremental depreciation and amortization expense of the rental equipment and intangible assets acquired, the elimination of interest expense related to historical debt as well as other expenses that are not part of the combined entity and transaction expenses. Pro Forma Pro Forma 2022 2022 Total revenues $ 339,309 $ 936,488 Net income $ 38,365 $ 83,626 2022 Disposition Komatsu Earthmoving Distributorship On December 15, 2022, we sold our Komatsu earthmoving distribution business to Houston, Texas based Waukesha-Pearce Industries, LLC (“WPI”) for $ 29.2 million, subject to customary closing adjustments. The WPI sale included the rights to the distribution of Komatsu earthmoving equipment in the state of Louisiana and counties located in southwestern Arkansas, a branch location and its associated property, plant and equipment in Kenner, LA, Komatsu new equipment inventory, assets at a leased facility in Bossier City, LA and certain other equipment, parts and supplies with a net book value of approximately $ 14.7 million. We recorded a gain from sales of property and equipment, net of $ 12.9 million and a gain of $ 2.5 million within other income on the Consolidated Statement of Operations for the year ended December 31, 2022. The WPI sale did not qualify for discontinued operations as the divestiture does not meet the definition of a component. 2021 Disposition Crane Sale On July 19, 2021, the Company entered into a definitive agreement to sell its crane business to a wholly-owned subsidiary of The Manitowoc Company, Inc. for $ 130.0 million in cash, which was subject to adjustment based on actual amounts of net working capital and crane rental fleet net book value delivered at transaction closing. The Company executed the transaction closing on October 1, 2021 subject to customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act, resulting in proceeds of $ 135.9 million, which was subject to the finalization of adjustments. During June 2022, closing adjustments of $ 1.9 million were finalized and recorded as discontinued operations on the consolidated statement of income. This disposition represents the Company’s strategic shift to a pure-play rental business. In accordance with ASC 360, Property, Plant, and Equipment, the Company ceased recording depreciation and amortization for Crane Sale related rental fleet, property, plant and equipment, and right of use lease assets upon qualifying as held for sale. In accordance with ASC 205-20, the Company determined that discontinued operations presentation was met during the third quarter of fiscal year 2021. As part of the divestiture, we entered into a transition services agreement with the buyer to assist them in the transition of certain functions, including, but not limited to, information technology, accounting and human resources for a period of sixty days up to six months . Aside from these customary transition services, there will be no continuing involvement with the crane business after its disposal. The Company reported financial results of the crane business within all of our segments: equipment rentals, used equipment sales, new equipment sales, parts sales and service revenues. Additionally, the crane business was included within the equipment rental component 2, used equipment sales, new equipment sales, parts sales and service revenues goodwill reporting units. As a result of the agreement to sell the Company’s crane business, its results are reported separately as discontinued operations in our consolidated statements of income for all periods presented. As permitted, the Company elected not to adjust the consolidated statements of cash flows to exclude cash flows attributable to discontinued operations. Accordingly, we disclosed the depreciation, capital expenditures and significant operating and investing non-cash items related to the Crane Sale below. The following tables (amounts in thousands) present the Crane Sale results as reported in loss from discontinued operations within our condensed consolidated statements of income. Nine Months Ended September 30, 2022 Total revenues $ — Total cost of revenues — Gross profit — Selling, general and administrative expenses — Merger and other 132 Loss on sales of property and equipment, net — Loss from discontinued operations ( 132 ) Other, net ( 1,917 ) Loss before benefit from income taxes ( 2,049 ) Benefit from income taxes ( 525 ) Net loss from discontinued operations $ ( 1,524 ) Cash flows from discontinued operations was as follows (amounts in thousands): Nine Months Ended September 30, 2022 Operating activities of discontinued operations: Loss on sale of discontinued operations 1,917 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | (4) Fair Value of Financial Instruments Fair value is defined as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The FASB fair value measurement guidance established a fair value hierarchy that prioritizes the inputs used to measure fair value. The three broad levels of the fair value hierarchy are as follows: Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities Level 2 – Quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly Level 3 – Unobservable inputs for which little or no market data exists, therefore requiring a company to develop its own assumptions The carrying value of financial instruments reported in the accompanying condensed consolidated balance sheets for cash and cash equivalents, accounts receivable, Credit Facility, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature, maturity or market interest rate of these financial instruments. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of September 30, 2023 and December 31, 2022 are presented in the table below (amounts in thousands). September 30, 2023 Carrying Fair Manufacturer flooring plans payable with interest computed at 8.75 % (Level 3) $ 2,657 $ 2,247 Senior Unsecured Notes due 2028 with interest computed at 3.875 % (Level 2) 1,242,491 1,067,188 December 31, 2022 Carrying Fair Manufacturer flooring plans payable with interest computed at 7.75 % (Level 3) $ 422 $ 392 Senior Unsecured Notes due 2028 with interest computed at 3.875 % (Level 2) 1,241,409 1,070,088 At September 30, 2023 and December 31, 2022 , the fair value of our senior unsecured notes due 2028 (the “Senior Unsecured Notes”) was based on quoted bond trading market prices for those notes. For our Level 3 unobservable inputs, we calculate a discount rate for our manufacturing floor plans payable based on the U.S. prime rate plus the applicable margin on our Credit Facility. The discount rate is disclosed in the above table. During the three and nine months ended September 3 0 , 2023 and 2022 , there were no transfers of financial assets or liabilities in or out of Level 3 of the fair value hierarchy. Fair Value Measurements on a Nonrecurring Basis Our non-financial assets, such as goodwill, intangible assets and property and equipment, are adjusted to fair value only when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. The result of our Q3 2023 goodwill impairment quantitative test indicated that the fair value of the Parts Sales reporting unit was less than the carrying value of the reporting unit, resulting in a goodwill impairment of $ 5.7 million. See Note 2 to the Condensed Consolidated financial statements for additional information related to the impairment quantitative test. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | (5) Stockholders’ Equity The following table summarizes the activity in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022, respectively (amounts in thousands, except share and per share data): Common Stock Additional Total Shares Amount Paid-in Treasury Retained Earnings Stockholders’ Balances at December 31, 2022 40,567,876 $ 405 $ 251,901 $ ( 69,964 ) $ 218,700 $ 401,042 Stock-based compensation — — 2,990 — — 2,990 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,794 ) ( 9,794 ) Issuance of common stock, net of forfeitures 132,501 1 — — — 1 Repurchase of 58,211 shares of restricted common stock — — — ( 3,226 ) — ( 3,226 ) Net income — — — — 25,674 25,674 Balances at March 31, 2023 40,700,377 406 254,891 ( 73,190 ) 234,580 416,687 Stock-based compensation — — 2,039 — — 2,039 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,046 ) ( 10,046 ) Restricted stock forfeitures ( 5,323 ) — — — — — Net income — — — — 41,216 41,216 Balances at June 30, 2023 40,695,054 406 256,930 ( 73,190 ) 265,750 449,896 Stock-based compensation — — 2,275 — — 2,275 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,091 ) ( 10,091 ) Issuance of common stock, net of restricted stock forfeitures 129,532 2 — — — 2 Repurchase of 57,421 shares of restricted common stock — — — ( 2,827 ) — ( 2,827 ) Net income — — — — 48,879 48,879 Balances at September 30, 2023 40,824,586 408 259,205 ( 76,017 ) 304,538 488,134 Balances at December 31, 2021 40,353,299 $ 403 $ 244,638 $ ( 68,294 ) $ 126,635 $ 303,382 Stock-based compensation — — 1,678 — — 1,678 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,851 ) ( 9,851 ) Issuance of common stock, net of restricted stock forfeitures 28,825 — — — — — Repurchase of 8,938 shares of restricted common stock — — — ( 343 ) — ( 343 ) Net income — — — — 16,296 16,296 Balances at March 31, 2022 40,382,124 403 246,316 ( 68,637 ) 133,080 311,162 Stock-based compensation — — 1,311 — — 1,311 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,964 ) ( 9,964 ) Restricted stock forfeitures ( 1,816 ) — — — — — Net income — — — — 26,346 26,346 Balances at June 30, 2022 40,380,308 403 247,627 ( 68,637 ) 149,462 328,855 Stock-based compensation — — 1,926 — — 1,926 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,145 ) ( 10,145 ) Issuance of common stock, net of restricted stock forfeitures 187,568 2 — — — 2 Repurchase of 37,116 shares of restricted common stock — — — ( 1,288 ) — ( 1,288 ) Net income — — — — 38,376 38,376 Balances at September 30, 2022 40,567,876 405 249,553 ( 69,925 ) 177,693 357,726 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | (6) Stock-Based Compensation We account for our stock-based compensation plans using the fair value recognition provisions of ASC 718, Stock Compensation . Stock-based compensation is measured at the grant date, based on the calculated fair value of the award, net of an estimated forfeiture rate, and is recognized as an expense over the requisite employee service period (generally the vesting period of the grant). The estimated forfeiture rate is based on historical experience and revised, if necessary, in subsequent periods for actual forfeitures. There were 742,666 shares available for future stock-based payment awards under our 2016 Stock-Based Incentive Compensation Plan as of September 30, 2023. Non-vested Stock The following table summarizes our non-vested stock activity for the nine months ended September 30, 2023: Number of Weighted Value Non-vested stock at December 31, 2022 560,456 $ 30.02 Granted 235,938 $ 47.00 Vested ( 283,332 ) $ 25.04 Forfeited ( 14,455 ) $ 35.11 Non-vested stock at September 30, 2023 498,607 $ 40.73 As of September 30, 2023, we had unrecognized compensation expense of approximate ly $ 17.3 million related to non-vested stock that we expect to be recognized over a weighted-average period of approximately 2.1 ye ars. The following table summarizes compensation expense related to non-vested stock, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Compensation expense $ 2,275 $ 1,926 $ 7,304 $ 4,915 |
Income per Share
Income per Share | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Income per Share | (7) Income per Share Income per common share for the three and nine months ended September 30, 2023 and 2022 is based on the weighted average number of common shares outstanding during the period. The effects of potentially dilutive securities that are anti-dilutive are not included in the computation of dilutive income per share. We include all common shares granted under our incentive compensation plan which remain unvested (“restricted common shares”) and contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid (“participating securities”), in the number of shares outstanding in our basic and diluted EPS calculations using the two-class method. All of our restricted common shares are currently participating securities. Under the two-class method, earnings per common share are computed by dividing the sum of distributed earnings allocated to common shareholders and undistributed earnings allocated to common shareholders by the weighted average number of common shares outstanding for the period. In applying the two-class method, distributed and undistributed earnings are allocated to both common shares and restricted common shares based on the total weighted average shares outstanding during the period. The number of restricted common shares outstanding was less than 1 % of total outstanding shares for the three and nine months ended September 30, 2023 and 2022 and, consequently, was immaterial to the basic and diluted EPS calculations. Therefore, use of the two-class method had no impact on our basic and diluted EPS calculations for the periods presented. The following table sets forth the computation of basic and diluted net income per common share for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income from continuing operations $ 48,879 $ 38,376 $ 115,769 $ 82,542 Net loss from discontinued operations — — — ( 1,524 ) Net income $ 48,879 $ 38,376 $ 115,769 $ 81,018 Weighted average number of common shares outstanding: Basic 36,134 36,462 36,078 36,402 Effect of dilutive non-vested restricted stock 188 91 248 142 Diluted 36,322 36,553 36,326 36,544 Income (loss) per share: Basic: Continuing operations $ 1.35 $ 1.05 $ 3.21 $ 2.27 Discontinued operations — — — ( 0.04 ) Net income per share $ 1.35 $ 1.05 $ 3.21 $ 2.23 Diluted: Continuing operations $ 1.35 $ 1.05 $ 3.19 $ 2.26 Discontinued operations — — — ( 0.04 ) Net income per share $ 1.35 $ 1.05 $ 3.19 $ 2.22 Common shares excluded from the denominator as anti-dilutive: Non-vested restricted stock 205 306 68 106 |
Senior Secured Credit Facility
Senior Secured Credit Facility | 9 Months Ended |
Sep. 30, 2023 | |
Secured Debt [Member] | |
Senior Secured Credit Facility | (8) Senior Secured Credit Facility On February 2, 2023, we amended, extended and restated the $ 750.0 million Credit Facility by entering into the Sixth Amended and Restated Credit Agreement by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E Equipment Services (Mid-Atlantic), LLC, H&E Equipment Services (Midwest), LLC, the other credit parties named therein, the lenders named therein, Wells Fargo Bank, National Association, as administrative agent, the other credit parties named therein, the lenders named therein, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The Sixth Amended and Restated Credit Agreement, among other things, (i) extended the maturity date of the credit facility to February 2, 2028 and (ii) amended the interest rate to SOFR plus a credit spread adjustment plus an applicable margin of 1.25 % to 1.75 %, depending on the Average Availability (as defined in the Amended and Restated Credit Agreement). As of September 30, 2023, we were in compliance with our financial covenants under the Sixth Amended and Restated Credit Agreement. At September 30, 2023, we had $ 142.2 million in borrowings outstanding under the Credit Facility and could borrow up to approximately $ 597.2 million , net of a $ 10.6 million outstanding letter of credit, and remain in compliance with the debt covenants under the Credit Facility. |
Senior Unsecured Notes
Senior Unsecured Notes | 9 Months Ended |
Sep. 30, 2023 | |
Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Senior Secured Credit Facility | (9) Senior Unsecured Note s On December 14, 2020, we completed the offering of our $ 1.25 billion, 3.875 % Senior Unsecured Notes due 2028 . For further information related to significant terms of the Senior Unsecured Notes, see Note 9 to the Company’s Consolidated Financial Statements included as Item 8 in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. As of September 30, 2023, we were in compliance with the covenants governing our notes. The following table reconciles our Senior Unsecured Notes to our Condensed Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2021 $ 1,239,967 Accretion of discount through December 31, 2022 1,172 Amortization of deferred financing costs through December 31, 2022 270 Balance at December 31, 2022 $ 1,241,409 Accretion of discount through September 30, 2023 879 Amortization of deferred financing costs through September 30, 2023 203 Balance at September 30, 2023 $ 1,242,491 |
Leases
Leases | 9 Months Ended |
Sep. 30, 2023 | |
Leases [Abstract] | |
Leases | (10) Leases For a discussion of Topic 842 and related disclosures, see Note 2 and Note 11 to the Consolidated Financial Statements in our Annual Report on Form 10-K for the year ended December 31, 2022. At September 30, 2023 , the weighted average remaining lease term for operating leases was approximately 7.6 years and for finance leases was approximately 8.8 years. The weighted average discount rate for operating leases and finance leases was approximately 6.4 % and 5.9 %, respectively at September 30, 2023. The future minimum lease payments of operating leases executed but not commenced as of September 30, 2023 are estimated to be $ 0.2 million, $ 1.3 million, $ 1.6 million, $ 1.6 million and $ 1.7 million for the years ended December 31, 2023, 2024 , 2025, 2026 and 2027, respectively, and $ 13.5 million thereafter. It is expected that these leases will commence during 2023 and 2024 . |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | (11) Segment Information We have identified five reportable segments: equipment rentals, used equipment sales, new equipment sales, parts sales and services revenues. These segments are based upon revenue streams and how management of the Company allocates resources and assesses performance. Our non-segmented revenues and costs relate primarily to ancillary charges associated with equipment repair services, and are not generally allocated to the segments. There were no sales between segments for any of the periods presented. Selling, general and administrative expenses as well as all other income and expense items below gross profit are not generally allocated to reportable segments. We do not compile discrete financial information by segments other than the information presented below. The following table presents information about our reportable segments (amounts in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Segment Revenues: Equipment rentals $ 315,811 $ 253,564 $ 869,278 $ 680,366 Used equipment sales 52,708 20,300 124,476 60,659 New equipment sales 12,633 23,491 29,308 71,013 Parts sales 11,897 16,745 36,082 48,976 Services revenues 6,739 8,610 21,058 25,633 Total segmented revenues 399,788 322,710 1,080,202 886,647 Non-segmented revenues 908 1,570 3,208 4,754 Total revenues $ 400,696 $ 324,280 $ 1,083,410 $ 891,401 Segment Gross Profit: Equipment rentals $ 149,849 $ 128,080 $ 400,582 $ 328,213 Used equipment sales 30,815 10,904 73,080 28,844 New equipment sales 1,671 3,242 4,030 10,164 Parts sales 3,277 4,864 10,346 13,559 Services revenues 3,997 5,445 13,028 16,511 Total segmented gross profit 189,609 152,535 501,066 397,291 Non-segmented gross loss ( 1,226 ) ( 652 ) ( 2,944 ) ( 1,494 ) Total gross profit $ 188,383 $ 151,883 $ 498,122 $ 395,797 Balances at September 30, December 31, 2023 2022 Segment identified assets: Equipment sales $ 123,230 $ 94,918 Equipment rentals 1,705,367 1,418,951 Parts and services 13,787 12,924 Total segment identified assets 1,842,384 1,526,793 Non-segment identified assets 746,750 764,906 Total assets $ 2,589,134 $ 2,291,699 The Company operates primarily in the United States. Our sales to international customers for both the three months ended September 30, 2023 and 2022 were 0.1 % of total revenues and for the nine months ended September 30, 2023 and 2022 were 0.1 % and 0.4 % of total revenues, respectively. No one customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Our condensed consolidated financial statements include the financial position and results of operations of H&E Equipment Services, Inc. and its wholly-owned subsidiaries H&E Finance Corp., GNE Investments, Inc., Great Northern Equipment, Inc., H&E California Holding, Inc., H&E Equipment Services (California), LLC, H&E Equipment Services (Midwest), Inc. and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we”, “us”, “our” or the “Company.” The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such regulations. In the opinion of management, all adjustments (consisting of all normal and recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023, and therefore, the results and trends in these interim condensed consolidated financial statements may not be the same for the entire year. These interim condensed consolidated financial statements should be read in conjunction with the annual audited consolidated financial statements and related notes in our Annual Report on Form 10-K for the year ended December 31, 2022, from which the consolidated balance sheet amounts as of December 31, 2022 were derived. All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. On October 1, 2021, the Company sold its crane business (the “Crane Sale”) and during June 2022, closing adjustments were finalized. The results of operations of the Crane Sale are reported in discontinued operations in the Condensed Consolidated Statements of Income for the 2022 period presented. All results and information in the consolidated financial statements are presented as continuing operations and exclude the Crane Sale unless otherwise noted specifically as discontinued operations. The Condensed Consolidated Statements of Cash Flows include cash flows related to the discontinued operations and accordingly, cash flow amounts for discontinued operations are disclosed in Note 3 “Acquisitions and Dispositions”. For additional information, refer to Note 3. The nature of our business is such that short-term obligations are typically met by cash flows generated from long-term assets. Consequently, the accompanying condensed consolidated balance sheets are presented on an unclassified basis. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash on hand and highly liquid investments with an original maturity of three months or less. |
Use of Estimates | Use of Estimates We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which requires management to use its judgment to make estimates and assumptions that affect the reported amounts of assets and liabilities and related disclosures at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reported period. These assumptions and estimates could have a material effect on our condensed consolidated financial statements. Actual results may differ materially from those estimates. We review our estimates on an ongoing basis based on information currently available, and changes in facts and circumstances may cause us to revise these estimates. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts in the Condensed Consolidated Statements of Income to conform to the current period presentation. These reclassifications did not have a material impact on previously reported amounts. |
Revenue Recognition | Revenue Recognition We recognize revenue in accordance with two different Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) standards: 1) Topic 606 and 2) Topic 842. Under Topic 606, Revenue from Contracts with Customers, revenue is recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. Revenue is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. Under Topic 842, Leases, we account for equipment rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. In the table below, revenues as presented in our condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 are summarized by type and by the applicable accounting standard. Three Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 271,019 $ 132 $ 271,151 $ 215,599 $ 86 $ 215,685 Re-rent revenue 9,106 — 9,106 8,441 — 8,441 Ancillary and other rental revenues: Delivery and pick-up — 19,090 19,090 — 15,646 15,646 Other 16,464 — 16,464 13,792 — 13,792 Total ancillary rental revenues 16,464 19,090 35,554 13,792 15,646 29,438 Total equipment rental revenues 296,589 19,222 315,811 237,832 15,732 253,564 Used equipment sales — 52,708 52,708 — 20,300 20,300 New equipment sales — 12,633 12,633 — 23,491 23,491 Parts sales — 11,897 11,897 — 16,745 16,745 Service revenues — 6,739 6,739 — 8,610 8,610 Other — 908 908 — 1,570 1,570 Total revenues $ 296,589 $ 104,107 $ 400,696 $ 237,832 $ 86,448 $ 324,280 Nine Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 745,317 $ 382 $ 745,699 $ 580,032 $ 272 $ 580,304 Re-rent revenue 25,357 — 25,357 22,247 — 22,247 Ancillary and other rental revenues: Delivery and pick-up — 52,255 52,255 — 40,645 40,645 Other 45,967 — 45,967 37,170 — 37,170 Total ancillary rental revenues 45,967 52,255 98,222 37,170 40,645 77,815 Total equipment rental revenues 816,641 52,637 869,278 639,449 40,917 680,366 Used equipment sales — 124,476 124,476 — 60,659 60,659 New equipment sales — 29,308 29,308 — 71,013 71,013 Parts sales — 36,082 36,082 — 48,976 48,976 Service revenues — 21,058 21,058 — 25,633 25,633 Other — 3,208 3,208 — 4,754 4,754 Total revenues $ 816,641 $ 266,769 $ 1,083,410 $ 639,449 $ 251,952 $ 891,401 Revenues by reporting segment are presented in Note 11 of our Condensed Consolidated Financial Statements, using the revenue captions reflected in our Consolidated Statements of Income. We believe that the disaggregation of our revenues from contracts to customers as reflected above, coupled with further discussion below and the reporting segments in Note 11, depict how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. For further information related to our accounting for revenues pursuant to Topic 606 and Topic 842, see Significant Accounting Policies in Note 2 to our Annual Report on Form 10-K for the year ended December 31, 2022. Receivables and contract assets and liabilities We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowance for doubtful accounts address our total revenues from Topic 606 and Topic 842. We believe concentration of credit risk with respect to our receivables is limited because our customer base is comprised of a large number of geographically diverse customers. No single customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented in this Quarterly Report on Form 10-Q. We manage credit risk through credit approvals, credit limits and other monitoring procedures. Pursuant to Topic 842 and Topic 326 for rental and non-rental receivables, respectively, we maintain an allowance for doubtful accounts that reflects our estimate of our expected credit losses. Our allowance is estimated using a loss rate model based on delinquency. The estimated loss rate is based on our historical experience with specific customers, our understanding of our current economic circumstances, reasonable and supportable forecasts, and our own judgment as to the likelihood of ultimate payment based upon available data. Our largest exposure to doubtful accounts is our rental operations, which as discussed above is accounted for under Topic 842 and as of September 30, 2023 represents 80.2 % of our total revenues and an approximate corresponding percentage of our receivables, net and associated allowance for doubtful accounts. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. The actual rate of future credit losses, however, may not be similar to past experience. Our estimate of doubtful accounts could change based on changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, we may be required to increase or decrease our allowance for doubtful accounts. Bad debt expense as a percentage of total revenues for both the nine months ended September 30, 2023 and 2022 were approximately 0.3 %. We do not have material contract assets, impairment losses associated therewith, or material contract liabilities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenues during the three months ended September 30, 2023 and 2022 that was included in the contract liability balance as of the beginning of such periods. |
Goodwill | Goodwill Goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment at least annually, as of October 1, or more frequently if triggering events occur or other impairment indicators arise that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e., before aggregation or combination), or one level below an operating segment (i.e., a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. We have identified that our five operating segments (Equipment Rentals, Used Equipment Sales, New Equipment Sales, Parts Sales and Service Revenues) each represent a reporting unit. Topic 350 consists of a one-step assessment to determine whether goodwill is impaired requiring an entity to compare each reporting unit’s carrying value, including goodwill, with its fair value. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. An entity also has an option to perform a qualitative assessment to determine if the quantitative impairment test is necessary. Considerable judgment is required by management in performing the qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. Based on our evaluation of our Parts Sales reporting unit and operating segment during the third quarter of 2023, we identified a triggering event requiring an interim impairment test. This triggering event related to a sustained parts segment decline in volume and actual revenue and earnings compared with our planned revenue and earnings utilized in our most recent quantitative goodwill impairment analysis following our business’s dispositions and strategic shift to be rental focused. Additional information on our dispositions is included in Footnote 3. No triggering event was identified related to our Equipment Rental and Used Equipment Sales reporting units. We estimated the fair value of our Parts Sales reporting unit by weighting results from the income approach and the market approach and concluded that our Parts Sales reporting unit had a fair value less than its carrying value, resulting in a $ 5.7 million impairment charge. The impairment was largely due to a current year decrease in parts revenues as a result of our business’s strategic shift and recent dispositions. This revenue decline, combined with our forecasted parts revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value. Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, such as the timing and duration of economic expansion or contraction cycles in our business, interest rates, and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. An adverse change in any of the assumptions used in our impairment testing (e.g., projected revenue and profit, discount rates, industry price multiples, etc.) could affect our fair value measurements and result in future impairments. If we are unable to achieve the financial forecasts used in our impairment analysis, we may also be required to record an impairment charge to our goodwill. The impairment charge described above is a non-cash item and does not affect our cash flows, liquidity or borrowing capacity under the Credit Facility, and the impairment charge is excluded from our financial results in evaluating our financial covenants under the Credit Facility. The change to the carrying amount of goodwill for the period ended September 30, 2023 is as follows (amounts in thousands): Equipment Rentals Used Eq. Sales New Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2021 (1) $ 48,976 $ 8,447 $ — $ 5,714 $ — $ 63,137 Increase (2) 39,553 — — — — 39,553 Balance at December 31, 2022 (1) 88,529 8,447 — 5,714 — 102,690 Increase (3) 29 — — — — 29 Decrease (4) — — — ( 5,714 ) — ( 5,714 ) Decrease (5) ( 132 ) — — — — ( 132 ) Balance at September, 2023 (1) $ 88,426 $ 8,447 $ — $ — $ — $ 96,873 (1) The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. (2) Increase due to the One Source Equipment Rentals, Inc. (“OSR”) Acquisition. (3) Increase is related to the closing adjustments of the OSR Acquisition during the first quarter of 2023. (4) Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. (5) Decrease is related to the final closing adjustment of the OSR Acquisition during the third quarter of 2023. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements On January 1, 2023 we adopted Accounting Standards Update (“ASU”) No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provided optional guidance for a limited time to ease the potential burden in accounting for or recognizing the effects of reference rate reform, particularly, the risk of cessation of the London Interbank Offered Rate (“LIBOR”) on financial reporting. Our exposure related to the expected cessation of LIBOR was limited to the interest expense and certain fees we incur on balances outstanding under our Senior Secured Credit Facility (the “Credit Facility”). We amended and restated our Credit Facility to transition to Secured Overnight Financing Rate (“SOFR”) as of February 2, 2023. The impact from the cessation of LIBOR as a reference rate did no t have a material impact on our consolidated financial statements. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Summary of Revenues by Type and by Applicable Accounting Standard | In the table below, revenues as presented in our condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 are summarized by type and by the applicable accounting standard. Three Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 271,019 $ 132 $ 271,151 $ 215,599 $ 86 $ 215,685 Re-rent revenue 9,106 — 9,106 8,441 — 8,441 Ancillary and other rental revenues: Delivery and pick-up — 19,090 19,090 — 15,646 15,646 Other 16,464 — 16,464 13,792 — 13,792 Total ancillary rental revenues 16,464 19,090 35,554 13,792 15,646 29,438 Total equipment rental revenues 296,589 19,222 315,811 237,832 15,732 253,564 Used equipment sales — 52,708 52,708 — 20,300 20,300 New equipment sales — 12,633 12,633 — 23,491 23,491 Parts sales — 11,897 11,897 — 16,745 16,745 Service revenues — 6,739 6,739 — 8,610 8,610 Other — 908 908 — 1,570 1,570 Total revenues $ 296,589 $ 104,107 $ 400,696 $ 237,832 $ 86,448 $ 324,280 Nine Months Ended September 30, 2023 2022 Topic 842 Topic 606 Total Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 745,317 $ 382 $ 745,699 $ 580,032 $ 272 $ 580,304 Re-rent revenue 25,357 — 25,357 22,247 — 22,247 Ancillary and other rental revenues: Delivery and pick-up — 52,255 52,255 — 40,645 40,645 Other 45,967 — 45,967 37,170 — 37,170 Total ancillary rental revenues 45,967 52,255 98,222 37,170 40,645 77,815 Total equipment rental revenues 816,641 52,637 869,278 639,449 40,917 680,366 Used equipment sales — 124,476 124,476 — 60,659 60,659 New equipment sales — 29,308 29,308 — 71,013 71,013 Parts sales — 36,082 36,082 — 48,976 48,976 Service revenues — 21,058 21,058 — 25,633 25,633 Other — 3,208 3,208 — 4,754 4,754 Total revenues $ 816,641 $ 266,769 $ 1,083,410 $ 639,449 $ 251,952 $ 891,401 |
Schedule of Carrying Amount of Goodwill | The change to the carrying amount of goodwill for the period ended September 30, 2023 is as follows (amounts in thousands): Equipment Rentals Used Eq. Sales New Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2021 (1) $ 48,976 $ 8,447 $ — $ 5,714 $ — $ 63,137 Increase (2) 39,553 — — — — 39,553 Balance at December 31, 2022 (1) 88,529 8,447 — 5,714 — 102,690 Increase (3) 29 — — — — 29 Decrease (4) — — — ( 5,714 ) — ( 5,714 ) Decrease (5) ( 132 ) — — — — ( 132 ) Balance at September, 2023 (1) $ 88,426 $ 8,447 $ — $ — $ — $ 96,873 (1) The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. (2) Increase due to the One Source Equipment Rentals, Inc. (“OSR”) Acquisition. (3) Increase is related to the closing adjustments of the OSR Acquisition during the first quarter of 2023. (4) Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. (5) Decrease is related to the final closing adjustment of the OSR Acquisition during the third quarter of 2023. |
Acquisitions and Dispositions (
Acquisitions and Dispositions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Acquisition [Line Items] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. $'s in thousands Cash $ 337 Accounts receivable 10,406 Inventory 332 Prepaid expenses and other assets 374 Rental equipment 102,436 Property and equipment 4,216 Operating lease right-of-use assets 2,388 Intangible assets (1) 12,300 Total identifiable assets acquired 132,789 Accounts payable ( 4,723 ) Tax payable ( 786 ) Operating lease liabilities ( 2,388 ) Deferred income taxes ( 27,653 ) Total liabilities assumed ( 35,550 ) Net identifiable assets acquired 97,239 Goodwill (2) 39,451 Net assets acquired $ 136,690 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value Life (years) Customer relationships $ 10,600 10 Noncompetition agreements 1,700 1 $ 12,300 The acquired goodwill has been allocated to the equipment rentals reporting unit. |
Schedule of Loss from Discontinued Operations and Cash Flows from Discontinued Operations | The following tables (amounts in thousands) present the Crane Sale results as reported in loss from discontinued operations within our condensed consolidated statements of income. Nine Months Ended September 30, 2022 Total revenues $ — Total cost of revenues — Gross profit — Selling, general and administrative expenses — Merger and other 132 Loss on sales of property and equipment, net — Loss from discontinued operations ( 132 ) Other, net ( 1,917 ) Loss before benefit from income taxes ( 2,049 ) Benefit from income taxes ( 525 ) Net loss from discontinued operations $ ( 1,524 ) Cash flows from discontinued operations was as follows (amounts in thousands): Nine Months Ended September 30, 2022 Operating activities of discontinued operations: Loss on sale of discontinued operations 1,917 |
One Source Equipment Rentals, Inc [Member] | |
Business Acquisition [Line Items] | |
Unaudited Pro Forma Financial Information | The pro forma information for the three and nine months ended September 30, 2022 in the table below (amounts in thousands) are for informational purposes only and gives effect to the OSR acquisition as if it had been completed on January 1, 2022 (the “pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisition been completed on the pro forma acquisition date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition, nor does it reflect additional revenue opportunities following the acquisition. The unaudited pro forma financial information includes adjustments primarily related to the incremental depreciation and amortization expense of the rental equipment and intangible assets acquired, the elimination of interest expense related to historical debt as well as other expenses that are not part of the combined entity and transaction expenses. Pro Forma Pro Forma 2022 2022 Total revenues $ 339,309 $ 936,488 Net income $ 38,365 $ 83,626 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements | The carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of September 30, 2023 and December 31, 2022 are presented in the table below (amounts in thousands). September 30, 2023 Carrying Fair Manufacturer flooring plans payable with interest computed at 8.75 % (Level 3) $ 2,657 $ 2,247 Senior Unsecured Notes due 2028 with interest computed at 3.875 % (Level 2) 1,242,491 1,067,188 December 31, 2022 Carrying Fair Manufacturer flooring plans payable with interest computed at 7.75 % (Level 3) $ 422 $ 392 Senior Unsecured Notes due 2028 with interest computed at 3.875 % (Level 2) 1,241,409 1,070,088 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Equity [Abstract] | |
Summary of Activity in Stockholders' Equity | The following table summarizes the activity in Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022, respectively (amounts in thousands, except share and per share data): Common Stock Additional Total Shares Amount Paid-in Treasury Retained Earnings Stockholders’ Balances at December 31, 2022 40,567,876 $ 405 $ 251,901 $ ( 69,964 ) $ 218,700 $ 401,042 Stock-based compensation — — 2,990 — — 2,990 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,794 ) ( 9,794 ) Issuance of common stock, net of forfeitures 132,501 1 — — — 1 Repurchase of 58,211 shares of restricted common stock — — — ( 3,226 ) — ( 3,226 ) Net income — — — — 25,674 25,674 Balances at March 31, 2023 40,700,377 406 254,891 ( 73,190 ) 234,580 416,687 Stock-based compensation — — 2,039 — — 2,039 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,046 ) ( 10,046 ) Restricted stock forfeitures ( 5,323 ) — — — — — Net income — — — — 41,216 41,216 Balances at June 30, 2023 40,695,054 406 256,930 ( 73,190 ) 265,750 449,896 Stock-based compensation — — 2,275 — — 2,275 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,091 ) ( 10,091 ) Issuance of common stock, net of restricted stock forfeitures 129,532 2 — — — 2 Repurchase of 57,421 shares of restricted common stock — — — ( 2,827 ) — ( 2,827 ) Net income — — — — 48,879 48,879 Balances at September 30, 2023 40,824,586 408 259,205 ( 76,017 ) 304,538 488,134 Balances at December 31, 2021 40,353,299 $ 403 $ 244,638 $ ( 68,294 ) $ 126,635 $ 303,382 Stock-based compensation — — 1,678 — — 1,678 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,851 ) ( 9,851 ) Issuance of common stock, net of restricted stock forfeitures 28,825 — — — — — Repurchase of 8,938 shares of restricted common stock — — — ( 343 ) — ( 343 ) Net income — — — — 16,296 16,296 Balances at March 31, 2022 40,382,124 403 246,316 ( 68,637 ) 133,080 311,162 Stock-based compensation — — 1,311 — — 1,311 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 9,964 ) ( 9,964 ) Restricted stock forfeitures ( 1,816 ) — — — — — Net income — — — — 26,346 26,346 Balances at June 30, 2022 40,380,308 403 247,627 ( 68,637 ) 149,462 328,855 Stock-based compensation — — 1,926 — — 1,926 Cash dividends declared on common stock ($ 0.275 per share) — — — — ( 10,145 ) ( 10,145 ) Issuance of common stock, net of restricted stock forfeitures 187,568 2 — — — 2 Repurchase of 37,116 shares of restricted common stock — — — ( 1,288 ) — ( 1,288 ) Net income — — — — 38,376 38,376 Balances at September 30, 2022 40,567,876 405 249,553 ( 69,925 ) 177,693 357,726 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Non-Vested Stock Activity | The following table summarizes our non-vested stock activity for the nine months ended September 30, 2023: Number of Weighted Value Non-vested stock at December 31, 2022 560,456 $ 30.02 Granted 235,938 $ 47.00 Vested ( 283,332 ) $ 25.04 Forfeited ( 14,455 ) $ 35.11 Non-vested stock at September 30, 2023 498,607 $ 40.73 |
Schedule of Compensation Expense Related to Non-Vested Stock | The following table summarizes compensation expense related to non-vested stock, which is included in selling, general and administrative expenses in the accompanying condensed consolidated statements of income for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Compensation expense $ 2,275 $ 1,926 $ 7,304 $ 4,915 |
Income per Share (Tables)
Income per Share (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Net Income Per Common Share | The following table sets forth the computation of basic and diluted net income per common share for the three and nine months ended September 30, 2023 and 2022 (amounts in thousands, except per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Net income from continuing operations $ 48,879 $ 38,376 $ 115,769 $ 82,542 Net loss from discontinued operations — — — ( 1,524 ) Net income $ 48,879 $ 38,376 $ 115,769 $ 81,018 Weighted average number of common shares outstanding: Basic 36,134 36,462 36,078 36,402 Effect of dilutive non-vested restricted stock 188 91 248 142 Diluted 36,322 36,553 36,326 36,544 Income (loss) per share: Basic: Continuing operations $ 1.35 $ 1.05 $ 3.21 $ 2.27 Discontinued operations — — — ( 0.04 ) Net income per share $ 1.35 $ 1.05 $ 3.21 $ 2.23 Diluted: Continuing operations $ 1.35 $ 1.05 $ 3.19 $ 2.26 Discontinued operations — — — ( 0.04 ) Net income per share $ 1.35 $ 1.05 $ 3.19 $ 2.22 Common shares excluded from the denominator as anti-dilutive: Non-vested restricted stock 205 306 68 106 |
Senior Unsecured Notes (Tables)
Senior Unsecured Notes (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets | The following table reconciles our Senior Unsecured Notes to our Condensed Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2021 $ 1,239,967 Accretion of discount through December 31, 2022 1,172 Amortization of deferred financing costs through December 31, 2022 270 Balance at December 31, 2022 $ 1,241,409 Accretion of discount through September 30, 2023 879 Amortization of deferred financing costs through September 30, 2023 203 Balance at September 30, 2023 $ 1,242,491 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Information about Reportable Segments | The following table presents information about our reportable segments (amounts in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2023 2022 2023 2022 Segment Revenues: Equipment rentals $ 315,811 $ 253,564 $ 869,278 $ 680,366 Used equipment sales 52,708 20,300 124,476 60,659 New equipment sales 12,633 23,491 29,308 71,013 Parts sales 11,897 16,745 36,082 48,976 Services revenues 6,739 8,610 21,058 25,633 Total segmented revenues 399,788 322,710 1,080,202 886,647 Non-segmented revenues 908 1,570 3,208 4,754 Total revenues $ 400,696 $ 324,280 $ 1,083,410 $ 891,401 Segment Gross Profit: Equipment rentals $ 149,849 $ 128,080 $ 400,582 $ 328,213 Used equipment sales 30,815 10,904 73,080 28,844 New equipment sales 1,671 3,242 4,030 10,164 Parts sales 3,277 4,864 10,346 13,559 Services revenues 3,997 5,445 13,028 16,511 Total segmented gross profit 189,609 152,535 501,066 397,291 Non-segmented gross loss ( 1,226 ) ( 652 ) ( 2,944 ) ( 1,494 ) Total gross profit $ 188,383 $ 151,883 $ 498,122 $ 395,797 Balances at September 30, December 31, 2023 2022 Segment identified assets: Equipment sales $ 123,230 $ 94,918 Equipment rentals 1,705,367 1,418,951 Parts and services 13,787 12,924 Total segment identified assets 1,842,384 1,526,793 Non-segment identified assets 746,750 764,906 Total assets $ 2,589,134 $ 2,291,699 |
Organization and Nature of Op_2
Organization and Nature of Operations - Additional Information (Detail) | Sep. 30, 2023 Branch |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of branch locations | 131 |
Significant Accounting Polici_4
Significant Accounting Policies - Summary of Revenues by Type and by Applicable Accounting Standard (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Revenues | $ 400,696 | $ 324,280 | $ 1,083,410 | $ 891,401 |
Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 296,589 | 237,832 | 816,641 | 639,449 |
Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 104,107 | 86,448 | 266,769 | 251,952 |
Rental Revenues [Member] | Owned Equipment Rentals [Member] | ||||
Revenues: | ||||
Revenues | 271,151 | 215,685 | 745,699 | 580,304 |
Rental Revenues [Member] | Owned Equipment Rentals [Member] | Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 271,019 | 215,599 | 745,317 | 580,032 |
Rental Revenues [Member] | Owned Equipment Rentals [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 132 | 86 | 382 | 272 |
Rental Revenues [Member] | Re Rent Revenues [Member] | ||||
Revenues: | ||||
Revenues | 9,106 | 8,441 | 25,357 | 22,247 |
Rental Revenues [Member] | Re Rent Revenues [Member] | Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 9,106 | 8,441 | 25,357 | 22,247 |
Ancillary And Other Rental Revenues [Member] | ||||
Revenues: | ||||
Revenues | 35,554 | 29,438 | 98,222 | 77,815 |
Ancillary And Other Rental Revenues [Member] | Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 16,464 | 13,792 | 45,967 | 37,170 |
Ancillary And Other Rental Revenues [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 19,090 | 15,646 | 52,255 | 40,645 |
Ancillary And Other Rental Revenues [Member] | Delivery and Pick-up [Member] | ||||
Revenues: | ||||
Revenues | 19,090 | 15,646 | 52,255 | 40,645 |
Ancillary And Other Rental Revenues [Member] | Delivery and Pick-up [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 19,090 | 15,646 | 52,255 | 40,645 |
Ancillary And Other Rental Revenues [Member] | Other [Member] | ||||
Revenues: | ||||
Revenues | 16,464 | 13,792 | 45,967 | 37,170 |
Ancillary And Other Rental Revenues [Member] | Other [Member] | Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 16,464 | 13,792 | 45,967 | 37,170 |
Total Equipment Rental Revenues [Member] | ||||
Revenues: | ||||
Revenues | 315,811 | 253,564 | 869,278 | 680,366 |
Total Equipment Rental Revenues [Member] | Topic 842 [Member] | ||||
Revenues: | ||||
Revenues | 296,589 | 237,832 | 816,641 | 639,449 |
Total Equipment Rental Revenues [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 19,222 | 15,732 | 52,637 | 40,917 |
Used Equipment Sales [Member] | ||||
Revenues: | ||||
Revenues | 52,708 | 20,300 | 124,476 | 60,659 |
Used Equipment Sales [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 52,708 | 20,300 | 124,476 | 60,659 |
New Equipment Sales [Member] | ||||
Revenues: | ||||
Revenues | 12,633 | 23,491 | 29,308 | 71,013 |
New Equipment Sales [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 12,633 | 23,491 | 29,308 | 71,013 |
Parts Sales [Member] | ||||
Revenues: | ||||
Revenues | 11,897 | 16,745 | 36,082 | 48,976 |
Parts Sales [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 11,897 | 16,745 | 36,082 | 48,976 |
Parts and Services [Member] | ||||
Revenues: | ||||
Revenues | 6,739 | 8,610 | 21,058 | 25,633 |
Parts and Services [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | 6,739 | 8,610 | 21,058 | 25,633 |
Other [Member] | ||||
Revenues: | ||||
Revenues | 908 | 1,570 | 3,208 | 4,754 |
Other [Member] | Topic 606 [Member] | ||||
Revenues: | ||||
Revenues | $ 908 | $ 1,570 | $ 3,208 | $ 4,754 |
Significant Accounting Polici_5
Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2023 USD ($) Customer | Sep. 30, 2022 Customer | Sep. 30, 2023 USD ($) Customer | Sep. 30, 2022 Customer | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | ||
Summary Of Significant Accounting Policy [Line Items] | |||||||
Customer accounted for more than 10% of revenue | Customer | 0 | 0 | 0 | 0 | |||
Bad debt expense as a percentage of total revenues | 0.30% | 0.30% | |||||
Impairment charge | $ 5,714,000 | $ 5,714,000 | [1] | ||||
Goodwill, net of accumulated impairment charges | $ 98,400 | $ 98,400 | $ 92,700 | $ 92,700 | |||
Topic 848 [Member] | |||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||
Change in accounting principle, accounting standards update, adoption date | Jan. 01, 2023 | Jan. 01, 2023 | |||||
Change in accounting principle, accounting standards update, adopted | true | true | |||||
Change in accounting principle, accounting standards update, immaterial effect | true | true | |||||
Customer Concentration Risk [Member] | Revenues [Member] | Topic 848 [Member] | |||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||
Percentage of revenue/purchase | 80.20% | ||||||
[1] Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Carrying Amount of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2023 | Dec. 31, 2022 | ||||
Goodwill [Line Items] | ||||||
Goodwill, Beginning Balance | [1] | $ 102,690 | $ 63,137 | |||
Increase | 29 | [2] | 39,553 | [3] | ||
Decrease | $ (5,714) | (5,714) | [4] | |||
Goodwill, Ending Balance | [1] | 96,873 | 96,873 | 102,690 | ||
Equipment Rentals [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, Beginning Balance | [1] | 88,529 | 48,976 | |||
Increase | 29 | [2] | 39,553 | [3] | ||
Decrease | [5] | (132) | ||||
Goodwill, Ending Balance | [1] | 88,426 | 88,426 | 88,529 | ||
Used Equipment Sales [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, Beginning Balance | [1] | 8,447 | 8,447 | |||
Goodwill, Ending Balance | [1] | $ 8,447 | 8,447 | 8,447 | ||
Parts Sales [Member] | ||||||
Goodwill [Line Items] | ||||||
Goodwill, Beginning Balance | [1] | 5,714 | 5,714 | |||
Decrease | [4] | $ (5,714) | ||||
Goodwill, Ending Balance | [1] | $ 5,714 | ||||
[1] The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. Increase is related to the closing adjustments of the OSR Acquisition during the first quarter of 2023. Increase due to the One Source Equipment Rentals, Inc. (“OSR”) Acquisition. Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. Decrease is related to the final closing adjustment of the OSR Acquisition during the third quarter of 2023. |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Carrying Amount of Goodwill (Parenthetical) (Details) - USD ($) | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Accounting Policies [Abstract] | |||
Goodwill, net of accumulated impairment charges | $ 98,400 | $ 92,700 | $ 92,700 |
Acquisitions and Dispositions -
Acquisitions and Dispositions - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Dec. 15, 2022 | Oct. 01, 2022 | Jul. 19, 2021 | Jun. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | ||
Business Acquisition [Line Items] | |||||||||
Goodwill | [1] | $ 96,873 | $ 102,690 | $ 63,137 | |||||
Gain on sales of property and equipment, net | $ 1,866 | $ 2,911 | |||||||
One Source Equipment Rentals, Inc [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Business acquisition, completion date | Oct. 01, 2022 | ||||||||
Business acquisition percentage of equity acquired | 100% | ||||||||
Aggregate consideration paid | $ 136,700 | ||||||||
Goodwill | [2] | 39,451 | |||||||
Accrued purchase price consideration | 800 | ||||||||
Acquisition costs | $ 800 | ||||||||
Crane Business [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from sale of business | $ 130,000 | ||||||||
Proceeds from sale of business subject to finalization of adjustments | $ 135,900 | ||||||||
Closing adjustments of discontinued operations | $ 1,900 | ||||||||
Sale of business, transaction closing date | Oct. 01, 2021 | ||||||||
Crane Business [Member] | Minimum [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Period of transition of certain functions | 60 days | ||||||||
Crane Business [Member] | Maximum [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Period of transition of certain functions | 6 months | ||||||||
Komatsu Earthmoving Distributorship [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Proceeds from sale of business | $ 29,200 | ||||||||
Net book value | 14,700 | ||||||||
Komatsu Earthmoving Distributorship [Member] | Sales From Property And Equipment Net [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Gain on sales of property and equipment, net | 12,900 | ||||||||
Komatsu Earthmoving Distributorship [Member] | Other Income [Member] | |||||||||
Business Acquisition [Line Items] | |||||||||
Gain on sales of property and equipment, net | $ 2,500 | ||||||||
[1] The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. The acquired goodwill has been allocated to the equipment rentals reporting unit. |
Acquisitions and Dispositions_2
Acquisitions and Dispositions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Oct. 01, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | |||||
Goodwill | [1] | $ 96,873 | $ 102,690 | $ 63,137 | |
One Source Equipment Rentals, Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 337 | ||||
Accounts Receivable | 10,406 | ||||
Inventory | 332 | ||||
Prepaid expenses and other assets | 374 | ||||
Rental equipment | 102,436 | ||||
Property and equipment | 4,216 | ||||
Operating lease right-of-use assets | 2,388 | ||||
Intangible assets | [2] | 12,300 | |||
Total identifiable assets acquired | 132,789 | ||||
Accounts payable | (4,723) | ||||
Tax payable | (786) | ||||
Operating lease liabilities | (2,388) | ||||
Deferred income taxes | (27,653) | ||||
Total liabilities assumed | (35,550) | ||||
Net identifiable assets acquired | 97,239 | ||||
Goodwill | [3] | 39,451 | |||
Net assets acquired | $ 136,690 | ||||
[1] The total carrying amount of goodwill as of December 31, 2021 and 2022 in the table above is reflected net of $ 92.7 million of accumulated impairment charges. The total carrying amount of goodwill as of September 30, 2023 in the table above is reflected net of $ 98.4 million of accumulated impairment charges. The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value Life (years) Customer relationships $ 10,600 10 Noncompetition agreements 1,700 1 $ 12,300 The acquired goodwill has been allocated to the equipment rentals reporting unit. |
Acquisitions and Dispositions_3
Acquisitions and Dispositions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Parenthetical) (Details) - One Source Equipment Rentals, Inc [Member] $ in Thousands | Oct. 01, 2022 USD ($) |
Business Acquisition [Line Items] | |
Fair Value (amounts in thousands) | $ 12,300 |
Customer Relationships [Member] | |
Business Acquisition [Line Items] | |
Fair Value (amounts in thousands) | $ 10,600 |
Life (years) | 10 years |
Noncompetition Agreements [Member] | |
Business Acquisition [Line Items] | |
Fair Value (amounts in thousands) | $ 1,700 |
Life (years) | 1 year |
Acquisitions and Dispositions_4
Acquisitions and Dispositions - Unaudited Pro Forma Financial Information (Details) - OSR [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||
Total revenue | $ 339,309 | $ 936,488 |
Net income | $ 38,365 | $ 83,626 |
Acquisitions and Dispositions_5
Acquisitions and Dispositions - Schedule of Loss from Discontinued Operations (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Cost of revenues: | |
Loss before benefit from income taxes | $ (2,049) |
Benefit from income taxes | (525) |
Net loss from discontinued operations | (1,524) |
Crane Business [Member] | |
Revenues: | |
Total revenues | 0 |
Cost of revenues: | |
Total cost of revenues | 0 |
Gross profit | 0 |
Selling, general and administrative expenses | 0 |
Merger and other | 132 |
Loss on sales of property and equipment, net | 0 |
Loss from discontinued operations | (132) |
Other, net | (1,917) |
Loss before benefit from income taxes | (2,049) |
Benefit from income taxes | (525) |
Net loss from discontinued operations | $ (1,524) |
Acquisitions and Dispositions_6
Acquisitions and Dispositions - Schedule of Cash Flows from Discontinued Operations (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Operating activities of discontinued operations: | |
Loss on sale of discontinued operations | $ (1,917) |
Crane Business [Member] | |
Operating activities of discontinued operations: | |
Loss on sale of discontinued operations | $ 1,917 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Detail) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Level 3 [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer Flooring Plans Payable Fair Value | $ 2,657 | $ 422 |
Level 3 [Member] | Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer Flooring Plans Payable Fair Value | 2,247 | 392 |
Level 2 [Member] | Carrying Amount [Member] | Senior Unsecured Notes Due 2028 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2) | 1,242,491 | 1,241,409 |
Level 2 [Member] | Fair Value [Member] | Senior Unsecured Notes Due 2028 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2028 with interest computed at 3.875% (Level 2) | $ 1,067,188 | $ 1,070,088 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Parenthetical) (Detail) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2023 | Dec. 31, 2022 | |
Level 3 [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 8.75% | 7.75% |
Level 3 [Member] | Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 8.75% | 7.75% |
Level 2 [Member] | Carrying Amount [Member] | Senior Unsecured Notes Due 2028 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, interest rate | 3.875% | 3.875% |
Senior unsecured notes, due year | 2028 | 2028 |
Level 2 [Member] | Fair Value [Member] | Senior Unsecured Notes Due 2028 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, interest rate | 3.875% | 3.875% |
Senior unsecured notes, due year | 2028 | 2028 |
Fair Value of Financial Instr_5
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | ||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||||
Transfer of financial assets | $ 0 | $ 0 | $ 0 | $ 0 | ||
Transfer of financial liabilities | 0 | $ 0 | 0 | $ 0 | ||
Impairment of goodwill | $ 5,714,000 | $ 5,714,000 | [1] | |||
Fair Value [Member] | Level 1 [Member] | Senior Unsecured Notes Due 2028 [Member] | ||||||
Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||||||
Senior unsecured notes, due year | 2028 | 2028 | ||||
[1] Decrease is related to the Parts Sales goodwill impairment calculated during the third quarter of 2023. |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity in Stockholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Capitalization, Equity [Line Items] | ||||||||
Beginning Balances | $ 449,896 | $ 416,687 | $ 401,042 | $ 328,855 | $ 311,162 | $ 303,382 | $ 401,042 | $ 303,382 |
Beginning Balances, shares | 40,567,876 | 40,567,876 | ||||||
Stock-based compensation | 2,275 | 2,039 | $ 2,990 | 1,926 | 1,311 | 1,678 | ||
Cash dividends declared on common stock ($0.275 per share) | (10,091) | (10,046) | (9,794) | (10,145) | (9,964) | (9,851) | ||
Issuance of common stock, net of restricted stock forfeitures | 2 | 2 | ||||||
Repurchase of shares of restricted common stock | (2,827) | (3,226) | (1,288) | (343) | ||||
Issuance of common stock, net of forfeitures | 1 | |||||||
Net income | 48,879 | 41,216 | 25,674 | 38,376 | 26,346 | 16,296 | $ 115,769 | 81,018 |
Ending Balances | $ 488,134 | 449,896 | 416,687 | 357,726 | 328,855 | 311,162 | $ 488,134 | 357,726 |
Ending Balances, shares | 40,824,586 | 40,824,586 | ||||||
Common Stock [Member] | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Beginning Balances | $ 406 | $ 406 | $ 405 | $ 403 | $ 403 | $ 403 | $ 405 | $ 403 |
Beginning Balances, shares | 40,695,054 | 40,700,377 | 40,567,876 | 40,380,308 | 40,382,124 | 40,353,299 | 40,567,876 | 40,353,299 |
Issuance of common stock, net of restricted stock forfeitures | $ 2 | $ 2 | ||||||
Issuance of common stock, net of restricted stock forfeitures, shares | 129,532 | 187,568 | 28,825 | |||||
Issuance of common stock, net of forfeitures | $ 1 | |||||||
Issuance of common stock, net of forfeitures, shares | 132,501 | |||||||
Restricted stock forfeitures, shares | (5,323) | (1,816) | ||||||
Ending Balances | $ 408 | $ 406 | $ 406 | $ 405 | $ 403 | $ 403 | $ 408 | $ 405 |
Ending Balances, shares | 40,824,586 | 40,695,054 | 40,700,377 | 40,567,876 | 40,380,308 | 40,382,124 | 40,824,586 | 40,567,876 |
Additional Paid-in Capital [Member] | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Beginning Balances | $ 256,930 | $ 254,891 | $ 251,901 | $ 247,627 | $ 246,316 | $ 244,638 | $ 251,901 | $ 244,638 |
Stock-based compensation | 2,275 | 2,039 | 2,990 | 1,926 | 1,311 | 1,678 | ||
Ending Balances | 259,205 | 256,930 | 254,891 | 249,553 | 247,627 | 246,316 | 259,205 | 249,553 |
Treasury Stock [Member] | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Beginning Balances | (73,190) | (73,190) | (69,964) | (68,637) | (68,637) | (68,294) | (69,964) | (68,294) |
Repurchase of shares of restricted common stock | (2,827) | (3,226) | (1,288) | (343) | ||||
Ending Balances | (76,017) | (73,190) | (73,190) | (69,925) | (68,637) | (68,637) | (76,017) | (69,925) |
Retained Earnings [Member] | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Beginning Balances | 265,750 | 234,580 | 218,700 | 149,462 | 133,080 | 126,635 | 218,700 | 126,635 |
Cash dividends declared on common stock ($0.275 per share) | (10,091) | (10,046) | (9,794) | (10,145) | (9,964) | (9,851) | ||
Net income | 48,879 | 41,216 | 25,674 | 38,376 | 26,346 | 16,296 | ||
Ending Balances | $ 304,538 | $ 265,750 | $ 234,580 | $ 177,693 | $ 149,462 | $ 133,080 | $ 304,538 | $ 177,693 |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Activity in Stockholders' Equity (Parenthetical) (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Schedule of Capitalization, Equity [Line Items] | ||||||||
Cash dividends declared on common stock, per share | $ 0.275 | $ 0.275 | $ 0.825 | $ 0.825 | ||||
Repurchase of restricted common stock, shares | 57,421 | 58,211 | 37,116 | 8,938 | ||||
Retained Earnings [Member] | ||||||||
Schedule of Capitalization, Equity [Line Items] | ||||||||
Cash dividends declared on common stock, per share | $ 0.275 | $ 0.275 | $ 0.275 | $ 0.275 | $ 0.275 | $ 0.275 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2023 USD ($) shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to non-vested stock | $ | $ 17.3 |
Expected non-vested stock recognized over a weighted-average period | 2 years 1 month 6 days |
2016 Stock-Based Incentive Compensation Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-Based incentive compensation plan | shares | 742,666 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Non-Vested Stock Activity (Detail) | 9 Months Ended |
Sep. 30, 2023 $ / shares shares | |
Share-Based Payment Arrangement [Abstract] | |
Non-vested stock, beginning balance, Number of Shares | shares | 560,456 |
Granted, Number of Shares | shares | 235,938 |
Vested, Number of Shares | shares | (283,332) |
Forfeited, Number of Shares | shares | (14,455) |
Non-vested stock, ending balance, Number of Shares | shares | 498,607 |
Non-vested stock, beginning balance, Weighted Average Grant Date Fair Value | $ / shares | $ 30.02 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 47 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 25.04 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 35.11 |
Non-vested stock, ending balance, Weighted Average Grant Date Fair Value | $ / shares | $ 40.73 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Compensation Expense Related to Non-Vested Stock (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||||
Compensation expense | $ 2,275 | $ 1,926 | $ 7,304 | $ 4,915 |
Income per Share - Additional I
Income per Share - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Abstract] | ||||
Restricted common shares, percentage | 1% | 1% | 1% | 1% |
Income per Share - Summary of C
Income per Share - Summary of Computation of Basic and Diluted Net Income Per Common Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2023 | Jun. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Earnings Per Share [Line Items] | ||||||||
Net income from continuing operations | $ 48,879 | $ 38,376 | $ 115,769 | $ 82,542 | ||||
Net loss from discontinued operations | (1,524) | |||||||
Net income | $ 48,879 | $ 41,216 | $ 25,674 | $ 38,376 | $ 26,346 | $ 16,296 | $ 115,769 | $ 81,018 |
Weighted average number of common shares outstanding: | ||||||||
Basic | 36,134 | 36,462 | 36,078 | 36,402 | ||||
Diluted | 36,322 | 36,553 | 36,326 | 36,544 | ||||
Basic: | ||||||||
Continuing operations | $ 1.35 | $ 1.05 | $ 3.21 | $ 2.27 | ||||
Discontinued operations | (0.04) | |||||||
Net income per share | 1.35 | 1.05 | 3.21 | 2.23 | ||||
Diluted: | ||||||||
Continuing operations | 1.35 | 1.05 | 3.19 | 2.26 | ||||
Discontinued operations | (0.04) | |||||||
Net income per share | $ 1.35 | $ 1.05 | $ 3.19 | $ 2.22 | ||||
Non-vested restricted stock [Member] | ||||||||
Weighted average number of common shares outstanding: | ||||||||
Effect of dilutive non-vested restricted stock | 188 | 91 | 248 | 142 | ||||
Common shares excluded from the denominator as anti-dilutive: | ||||||||
Non-vested restricted stock | 205 | 306 | 68 | 106 |
Senior Secured Credit Facility
Senior Secured Credit Facility - Additional Information (Detail) - USD ($) $ in Millions | Feb. 02, 2023 | Sep. 30, 2023 |
Great Northern Equipment, Inc [Member] | Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Existing credit facility with its lenders | $ 750 | |
Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit | $ 142.2 | |
Debt Instrument, Maturity Date, Description | extended the maturity date of the credit facility to February 2, 2028 | |
Debt Instrument, Maturity Date | Feb. 02, 2028 | |
Available borrowings under our senior secured credit facility | 597.2 | |
Outstanding letters of credit | $ 10.6 | |
Revolving Credit Facility [Member] | Maximum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |
Revolving Credit Facility [Member] | Minimum [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% |
Senior Unsecured Notes - Additi
Senior Unsecured Notes - Additional Information (Detail) - 3.875% Senior Notes [Member] $ in Millions | Dec. 14, 2020 USD ($) |
Debt Instrument [Line Items] | |
Aggregate principal amount | $ 1,250 |
Senior unsecured notes, interest rate | 3.875% |
Senior unsecured notes, maturity year | 2028 |
Senior Unsecured Notes - Reconc
Senior Unsecured Notes - Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | |||
Senior unsecured notes, beginning balance | $ 1,241,409 | ||
Amortization of deferred financing costs | 1,009 | $ 728 | |
Senior unsecured notes, ending balance | 1,242,491 | $ 1,241,409 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes, beginning balance | 1,241,409 | $ 1,239,967 | 1,239,967 |
Senior unsecured notes, ending balance | 1,242,491 | 1,241,409 | |
Senior Unsecured Notes [Member] | 3.875% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Accretion of discount | 879 | 1,172 | |
Amortization of deferred financing costs | $ 203 | $ 270 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | Sep. 30, 2023 USD ($) |
Leases [Abstract] | |
Weighted average remaining lease term for operating leases | 7 years 7 months 6 days |
Weighted average remaining lease term for finance leases | 8 years 9 months 18 days |
Weighted average discount rate for operating leases | 6.40% |
Weighted average discount rate for finance leases | 5.90% |
Future minimum operating lease payments 2023 | $ 0.2 |
Future minimum operating lease payments 2024 | 1.3 |
Future minimum operating lease payments 2025 | 1.6 |
Future minimum operating lease payments 2026 | 1.6 |
Future minimum operating lease payments 2027 | 1.7 |
Future minimum operating lease payments thereafter | $ 13.5 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 Customer | Sep. 30, 2022 Customer | Sep. 30, 2023 Customer Segment | Sep. 30, 2022 Customer | |
Segment Reporting [Abstract] | ||||
Number of reportable segment | Segment | 5 | |||
Sales to international customers | 0.10% | 0.10% | 0.10% | 0.40% |
Customer accounted for more than 10% of revenue | Customer | 0 | 0 | 0 | 0 |
Segment Information - Schedule
Segment Information - Schedule of Information about Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Segment Revenues: | |||||
Revenues | $ 400,696 | $ 324,280 | $ 1,083,410 | $ 891,401 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 188,383 | 151,883 | 498,122 | 395,797 | |
Segment identified assets: | |||||
Total assets | 2,589,134 | 2,589,134 | $ 2,291,699 | ||
Equipment Rentals [Member] | |||||
Segment Revenues: | |||||
Revenues | 315,811 | 253,564 | 869,278 | 680,366 | |
Used Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 52,708 | 20,300 | 124,476 | 60,659 | |
New Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 12,633 | 23,491 | 29,308 | 71,013 | |
Parts Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 11,897 | 16,745 | 36,082 | 48,976 | |
Services Revenues [Member] | |||||
Segment Revenues: | |||||
Revenues | 6,739 | 8,610 | 21,058 | 25,633 | |
Operating Segments [Member] | |||||
Segment Revenues: | |||||
Revenues | 399,788 | 322,710 | 1,080,202 | 886,647 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 189,609 | 152,535 | 501,066 | 397,291 | |
Segment identified assets: | |||||
Total assets | 1,842,384 | 1,842,384 | 1,526,793 | ||
Operating Segments [Member] | Equipment Rentals [Member] | |||||
Segment Revenues: | |||||
Revenues | 315,811 | 253,564 | 869,278 | 680,366 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 149,849 | 128,080 | 400,582 | 328,213 | |
Segment identified assets: | |||||
Total assets | 1,705,367 | 1,705,367 | 1,418,951 | ||
Operating Segments [Member] | Used Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 52,708 | 20,300 | 124,476 | 60,659 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 30,815 | 10,904 | 73,080 | 28,844 | |
Segment identified assets: | |||||
Total assets | 123,230 | 123,230 | 94,918 | ||
Operating Segments [Member] | New Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 12,633 | 23,491 | 29,308 | 71,013 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 1,671 | 3,242 | 4,030 | 10,164 | |
Operating Segments [Member] | Parts Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 11,897 | 16,745 | 36,082 | 48,976 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 3,277 | 4,864 | 10,346 | 13,559 | |
Operating Segments [Member] | Services Revenues [Member] | |||||
Segment Revenues: | |||||
Revenues | 6,739 | 8,610 | 21,058 | 25,633 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | 3,997 | 5,445 | 13,028 | 16,511 | |
Operating Segments [Member] | Parts and Services [Member] | |||||
Segment identified assets: | |||||
Total assets | 13,787 | 13,787 | 12,924 | ||
Non-Segmented [Member] | |||||
Segment Revenues: | |||||
Revenues | 908 | 1,570 | 3,208 | 4,754 | |
Segment Gross Profit: | |||||
Total gross profit (loss) | (1,226) | $ (652) | (2,944) | $ (1,494) | |
Segment identified assets: | |||||
Total assets | $ 746,750 | $ 746,750 | $ 764,906 |