Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Jul. 20, 2017 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | HEES | |
Entity Registrant Name | H&E Equipment Services, Inc. | |
Entity Central Index Key | 1,339,605 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 35,570,706 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
ASSETS | ||
Cash | $ 6,995 | $ 7,683 |
Receivables, net of allowance for doubtful accounts of $3,432 and $3,769, respectively | 141,475 | 140,037 |
Inventories, net of reserves for obsolescence of $866 and $900, respectively | 94,402 | 53,909 |
Prepaid expenses and other assets | 9,424 | 7,513 |
Rental equipment, net of accumulated depreciation of $465,893 and $437,522, respectively | 902,378 | 893,816 |
Property and equipment, net of accumulated depreciation and amortization of $123,980 and $118,812, respectively | 104,632 | 105,492 |
Deferred financing costs, net of accumulated amortization of $12,566 and $12,160, respectively | 1,558 | 1,964 |
Goodwill | 31,197 | 31,197 |
Total assets | 1,292,061 | 1,241,611 |
Liabilities: | ||
Amounts due on senior secured credit facility | 164,852 | 162,642 |
Accounts payable | 81,053 | 39,432 |
Manufacturer flooring plans payable | 25,824 | 30,780 |
Accrued expenses payable and other liabilities | 60,720 | 56,833 |
Dividends payable | 89 | 67 |
Senior unsecured notes, net of unaccreted discount of $867 and $952 and deferred financing costs of $1,219 and $1,339, respectively | 627,914 | 627,711 |
Capital leases payable | 1,597 | 1,704 |
Deferred income taxes | 186,922 | 177,835 |
Deferred compensation payable | 1,869 | 1,842 |
Total liabilities | 1,150,840 | 1,098,846 |
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; 39,512,974 and 39,496,759 shares issued at June 30, 2017 and December 31, 2016, respectively, and 35,570,706 and 35,554,491 shares outstanding at June 30, 2017 and December 31, 2016, respectively | 394 | 394 |
Additional paid-in capital | 225,438 | 223,544 |
Treasury stock at cost, 3,942,268 shares of common stock held at June 30, 2017 and December 31, 2016 | (60,966) | (60,966) |
Retained deficit | (23,645) | (20,207) |
Total stockholders’ equity | 141,221 | 142,765 |
Total liabilities and stockholders’ equity | $ 1,292,061 | $ 1,241,611 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables | $ 3,432 | $ 3,769 |
Reserves for obsolescence inventories | 866 | 900 |
Accumulated depreciation, rental equipment | 465,893 | 437,522 |
Accumulated depreciation and amortization, property and equipment | 123,980 | 118,812 |
Accumulated amortization, deferred financing costs | 12,566 | 12,160 |
Unaccreted discount, net | 867 | 952 |
Deferred financing costs | $ 1,219 | $ 1,339 |
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 | 39,512,974 | 39,496,759 |
Common stock, shares outstanding | 35,570,706 | 35,554,491 |
Treasury stock, shares | 3,942,268 | 3,942,268 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Revenues | $ 249,363 | $ 242,095 | $ 476,191 | $ 489,105 |
Cost of revenues: | ||||
Cost of revenues | 162,023 | 160,387 | 311,179 | 326,253 |
Gross profit | 87,340 | 81,708 | 165,012 | 162,852 |
Selling, general and administrative expenses | 59,807 | 57,049 | 117,125 | 116,423 |
Gain on sales of property and equipment, net | 1,135 | 712 | 2,106 | 1,374 |
Income from operations | 28,668 | 25,371 | 49,993 | 47,803 |
Other income (expense): | ||||
Interest expense | (13,373) | (13,353) | (26,605) | (26,760) |
Other, net | 373 | 689 | 810 | 1,119 |
Total other expense, net | (13,000) | (12,664) | (25,795) | (25,641) |
Income before provision for income taxes | 15,668 | 12,707 | 24,198 | 22,162 |
Provision for income taxes | 5,790 | 5,204 | 8,930 | 9,085 |
Net income | $ 9,878 | $ 7,503 | $ 15,268 | $ 13,077 |
Net income per common share: | ||||
Basic | $ 0.28 | $ 0.21 | $ 0.43 | $ 0.37 |
Diluted | $ 0.28 | $ 0.21 | $ 0.43 | $ 0.37 |
Weighted average common shares outstanding: | ||||
Basic | 35,473 | 35,354 | 35,469 | 35,347 |
Diluted | 35,631 | 35,480 | 35,626 | 35,439 |
Dividends declared per common share outstanding | $ 0.275 | $ 0.275 | $ 0.55 | $ 0.55 |
Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | $ 41,838 | $ 39,675 | $ 82,741 | $ 79,172 |
Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 20,162 | 18,021 | 38,536 | 34,784 |
Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 232,058 | 225,911 | 442,923 | 457,772 |
Cost of revenues: | ||||
Gross profit | 86,916 | 81,606 | 165,050 | 162,657 |
Operating Segments [Member] | Equipment Rentals [Member] | ||||
Revenues: | ||||
Revenues | 118,370 | 108,650 | 225,687 | 211,488 |
Cost of revenues: | ||||
Gross profit | 56,370 | 50,954 | 104,410 | 97,532 |
Operating Segments [Member] | Equipment Rentals [Member] | Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 41,838 | 39,675 | 82,741 | 79,172 |
Operating Segments [Member] | Equipment Rentals [Member] | Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 20,162 | 18,021 | 38,536 | 34,784 |
Operating Segments [Member] | New Equipment Sales [Member] | ||||
Revenues: | ||||
Revenues | 45,669 | 49,893 | 79,943 | 107,072 |
Cost of revenues: | ||||
Cost of revenues | 40,450 | 44,531 | 70,831 | 95,005 |
Gross profit | 5,219 | 5,362 | 9,112 | 12,067 |
Operating Segments [Member] | Used Equipment Sales [Member] | ||||
Revenues: | ||||
Revenues | 24,106 | 23,769 | 52,969 | 51,343 |
Cost of revenues: | ||||
Cost of revenues | 17,002 | 16,875 | 36,863 | 35,387 |
Gross profit | 7,104 | 6,894 | 16,106 | 15,956 |
Operating Segments [Member] | Parts Sales [Member] | ||||
Revenues: | ||||
Revenues | 27,969 | 26,654 | 53,300 | 54,623 |
Cost of revenues: | ||||
Cost of revenues | 20,358 | 19,213 | 38,571 | 39,476 |
Gross profit | 7,611 | 7,441 | 14,729 | 15,147 |
Operating Segments [Member] | Services Revenues [Member] | ||||
Revenues: | ||||
Revenues | 15,944 | 16,945 | 31,024 | 33,246 |
Cost of revenues: | ||||
Cost of revenues | 5,332 | 5,990 | 10,331 | 11,291 |
Gross profit | 10,612 | 10,955 | 20,693 | 21,955 |
Other [Member] | ||||
Revenues: | ||||
Revenues | 17,305 | 16,184 | 33,268 | 31,333 |
Cost of revenues: | ||||
Cost of revenues | 16,881 | 16,082 | 33,306 | 31,138 |
Gross profit | $ 424 | $ 102 | $ (38) | $ 195 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 15,268 | $ 13,077 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization of property and equipment | 12,115 | 13,464 |
Depreciation of rental equipment | 82,741 | 79,172 |
Amortization of deferred financing costs | 526 | 526 |
Accretion of note discount, net of premium amortization | 84 | 83 |
Provision for losses on accounts receivable | 1,858 | 2,008 |
Provision for inventory obsolescence | 71 | 14 |
Change in deferred income taxes | 9,968 | 9,182 |
Stock-based compensation expense | 1,894 | 1,667 |
Gain from sales of property and equipment, net | (2,106) | (1,374) |
Gain from sales of rental equipment, net | (15,349) | (15,467) |
Changes in operating assets and liabilities: | ||
Receivables | (3,274) | 7,110 |
Inventories | (49,585) | (52,467) |
Prepaid expenses and other assets | (1,911) | 489 |
Accounts payable | 41,621 | 22,322 |
Manufacturer flooring plans payable | (4,956) | (16,466) |
Accrued expenses payable and other liabilities | 3,715 | 4,600 |
Deferred compensation payable | 27 | (363) |
Net cash provided by operating activities | 92,707 | 67,577 |
Cash flows from investing activities: | ||
Purchases of property and equipment | (12,137) | (11,465) |
Purchases of rental equipment | (112,946) | (69,144) |
Proceeds from sales of property and equipment | 3,137 | 1,683 |
Proceeds from sales of rental equipment | 46,013 | 44,501 |
Net cash used in investing activities | (75,933) | (34,425) |
Cash flows from financing activities: | ||
Borrowings on senior secured credit facility | 484,252 | 482,513 |
Payments on senior secured credit facility | (482,042) | (492,866) |
Dividends paid | (19,565) | (19,505) |
Payments of capital lease obligations | (107) | (100) |
Net cash used in financing activities | (17,462) | (29,958) |
Net increase (decrease) in cash | (688) | 3,194 |
Cash, beginning of period | 7,683 | 7,159 |
Cash, end of period | 6,995 | 10,353 |
Noncash asset purchases: | ||
Assets transferred from new and used inventory to rental fleet | 9,021 | 34,461 |
Purchases of property and equipment included in accrued expenses payable and other liabilities | (173) | 222 |
Cash paid during the period for: | ||
Interest | 25,992 | 26,215 |
Income taxes paid, net of refunds received | $ 446 | $ 269 |
Organization and Nature of Oper
Organization and Nature of Operations | 6 Months Ended |
Jun. 30, 2017 | |
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 and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we” or “us” or “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 six month periods ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, 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, 2016, from which the consolidated balance sheet amounts as of December 31, 2016 were derived. All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. The nature of our business is such that short-term obligations are typically met by cash flows generated from long-term assets. Consequently, and consistent with industry practice, the accompanying condensed consolidated balance sheets are presented on an unclassified basis. Nature of Operations As one of the largest integrated equipment services companies in the United States focused on heavy construction and industrial equipment, we rent, sell and provide parts and service support for four core categories of specialized equipment: (1) hi-lift or aerial work platform equipment; (2) cranes; (3) earthmoving equipment; and (4) industrial lift trucks. By providing equipment rental, sales, on-site parts, repair and maintenance functions under one roof, we are a one-stop provider for our customers’ varied equipment needs. This full service approach provides us with multiple points of customer contact, enables us to maintain a high quality rental fleet, as well as an effective distribution channel for fleet disposal and provides cross‑selling opportunities among our new and used equipment sales, rental, parts sales and services operations. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2017 | |
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, 2016. During the six month period ended June 30, 2017, there were no significant changes to those accounting policies. 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. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue Recognition Revenues from equipment rentals accounted for 47.4% of our total revenues for the six months ended June 30, 2017. We believe the accounting for equipment rental revenues is outside the scope of ASU 2014-09. Upon adoption of ASU 2014-09, revenues from equipment rentals will be accounted for pursuant to current lease accounting guidance until our adoption of the new lease accounting standard as further discussed in the subsequent paragraph below. Revenues from new and used equipment sales, parts and services revenues and other revenues are subject to ASU 2014-09 upon adoption. We have reviewed the accounting for sales of new and used equipment, which accounted for 27.9% of our total revenues for the six months ended June 30, 2017, and do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. Parts revenues, services revenues and other revenues comprised the remaining 24.7% of our total revenues for the six months ended June 30, 2017. The impact of ASU 2014-09 on these revenues is not currently estimable. Our review of this standard, including our evaluation of the available transition methods and the impact of the standard on our internal controls over financial reporting, is ongoing. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Our operating leases include the real estate where all but 11 of our 78 branch locations are located as of June 30, 2017. Additionally, the Company leases numerous types of non-rental equipment. We have begun accumulating the information related to these leases and expect that the quantification of the amount of the lease assets and lease liabilities that we will recognize on our consolidated balance sheet upon adoption of ASU 2016-02 will take significant time given the size of our lease portfolio. We are also concurrently evaluating our internal processes and controls over financial reporting with respect to the impact that the new lease standard will have on our lease administration activities. As mentioned in the ASU 2014-09 discussion above, our equipment rental business involves rental agreements with customers whereby we are the lessor in the transaction and therefore, we believe that such transactions are subject to the lessor accounting guidance of ASU 2016-02. Our evaluation of ASU 2016-02 is ongoing and the impact that this new guidance will have on our consolidated financial statements, as well as our internal controls over financial reporting, is not currently estimable. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Recent Accounting Pronouncements Adopted in the First Quarter of 2017 In July 2015, the FASB issued ASU 2015-11, Inventory: Simplifying the Measurement of Inventory In March 2016, the FASB Issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ASU 2016-09 eliminates the prior guidance requirement that allowed under certain circumstances the realization of excess tax benefits prior to recognition of those excess tax benefits. Under prior guidance, companies could not recognize excess tax benefits when an option was exercised or a share vested if the related tax deduction increased a net operating loss carryforward rather than reduced income taxes payable. ASU 2016-09 requires companies to apply this part of the guidance using a modified retrospective transition method and record a cumulative effect adjustment for previously unrecognized excess tax benefits. Accordingly, we recorded a cumulative effect adjustment to accumulated deficit as of January 1, 2017 of approximately $0.9 million for all excess tax benefits that had not been previously recognized because the related tax deduction had not reduced income taxes payable. ASU 2016-09 also clarifies that an entity should classify excess tax benefits along with other income tax cash flows as an operating activity in the statement of cash flows. This change eliminates the prior practice of grossing up the statement of cash flows for the effect of windfalls, i.e. reporting windfalls as outflows in operating activities and as inflows in financing activities. Under ASU 2016-09, the effect of windfalls will generally be reflected in net income from continuing operations under the indirect method. We have adopted this portion of the guidance on a retrospective basis. ASU 2016-09 also clarifies that employee taxes paid when an employer withholds shares of stock for tax withholding purposes be reported as financing activities in the consolidated statements of cash flows, which is how the Company has historically presented such activities in our statement of cash flows. We have elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. Additional amendments to the accounting for statutory withholding tax requirements had no impact on our consolidated financial statements. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | (3) 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, accounts receivable, accounts payable and accrued expenses payable and other liabilities approximate fair value due to the immediate or short-term nature or maturity of these financial instruments. The fair value of our letter of credit is based on fees currently charged for similar agreements. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of June 30, 2017 and December 31, 2016 are presented in the table below (amounts in thousands) and have been calculated based upon market quotes and present value calculations based on market rates. June 30, 2017 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 25,824 $ 22,149 Senior unsecured notes with interest computed at 7.0% (Level 1) 627,914 655,200 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,597 1,160 Letter of credit (Level 3) — 155 December 31, 2016 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 30,780 $ 26,780 Senior unsecured notes with interest computed at 7.0% (Level 1) 627,711 663,075 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,704 1,164 Letter of credit (Level 3) — 155 During the three and six month periods ended June 30, 2017 and 2016, there were no transfers of financial assets or liabilities in or out of Level 1, Level 2 or Level 3 of the fair value hierarchy. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | (4) Stockholders’ Equity The following table summarizes the activity in Stockholders’ Equity for the six month period ended June 30, 2017 (amounts in thousands, except share data): Common Stock Additional Retained Total Shares Issued Amount Paid-in Capital Treasury Stock Earnings (Deficit) Stockholders’ Equity Balances at December 31, 2016 39,496,759 $ 394 $ 223,544 $ (60,966 ) $ (20,207 ) $ 142,765 Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 (see note (2)) — — — — 881 881 Stock-based compensation — — 1,894 — — 1,894 Cash dividends declared on common stock ($0.275 per share) — — — — (19,587 ) (19,587 ) Issuance of common stock 16,215 — — — — — Net income — — — — 15,268 15,268 Balances at June 30, 2017 39,512,974 $ 394 $ 225,438 $ (60,966 ) $ (23,645 ) $ 141,221 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | (5) Stock-Based Compensation We account for our stock-based compensation plans using the fair value recognition provisions of Accounting Standards Codification (“ASC”) 718, Stock Compensation Non-vested Stock The following table summarizes our non-vested stock activity for the six months ended June 30, 2017: Number of Shares Weighted Average Grant Date Fair Non-vested stock at December 31, 2016 400,801 $ 18.86 Granted 21,658 $ 25.86 Vested (21,658 ) $ 25.86 Forfeited (5,443 ) $ 18.95 Non-vested stock at June 30, 2017 395,358 $ 18.86 As of June 30, 2017, we had unrecognized compensation expense of approximately $3.4 million related to non-vested stock that we expect to be recognized over a weighted-average period of approximately 1.9 years. 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 six months ended June 30, 2017 and 2016 (amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Compensation expense $ 713 $ 626 $ 1,894 $ 1,667 Stock Options At June 30 2017, there is no unrecognized compensation expense as all previously issued and outstanding stock option awards have expired. The following table represents stock option activity for the six months ended June 30, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Contractual Life In Years Outstanding options at December 31, 2016 4,500 $ 19.27 Granted — — Exercised — — Canceled, forfeited or expired (4,500 ) $ 19.27 Outstanding options at June 30, 2017 — — — Options exercisable at June 30, 2017 — — — |
Income per Share
Income per Share | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Income per Share | (6) Income per Share Income per common share for the three and six months ended June 30, 2017 and 2016 are 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 approximately 0.8% of total outstanding shares for each of the three and six month periods ended June 30, 2017 and 2016, respectively, 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 six months ended June 30, 2017 and 2016 (amounts in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Basic net income per share: Net income $ 9,878 $ 7,503 $ 15,268 $ 13,077 Weighted average number of common shares outstanding 35,473 35,354 35,469 35,347 Net income per share of common stock – basic $ 0.28 $ 0.21 $ 0.43 $ 0.37 Diluted net income per share: Net income $ 9,878 $ 7,503 $ 15,268 $ 13,077 Weighted average number of common shares outstanding 35,473 35,354 35,469 35,347 Effect of dilutive securities: Effect of dilutive stock options — — — — Effect of dilutive non-vested restricted stock 158 126 157 92 Weighted average number of common shares outstanding – diluted 35,631 35,480 35,626 35,439 Net income per share of common stock – diluted $ 0.28 $ 0.21 $ 0.43 $ 0.37 Common shares excluded from the denominator as anti-dilutive: Stock options — 1 — 7 Non-vested restricted stock — — — 4 |
Senior Secured Credit Facility
Senior Secured Credit Facility | 6 Months Ended |
Jun. 30, 2017 | |
Secured Debt [Member] | |
Senior Secured Credit Facility | (7) Senior Secured Credit Facility We and our subsidiaries are parties to a $602.5 million senior secured credit facility (the “Credit Facility”) with Wells Fargo Capital Finance, LLC (“Wells Fargo”), as agent (as successor in such capacity to General Electric Capital Corporation (“GE Capital”)), and the lenders named therein (the “Lenders”). On May 21, 2014, we amended, extended and restated the Credit Facility by entering into the Fourth Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, the other credit parties named therein, the lenders named therein, GE Capital, as administrative agent, Bank of America, N.A. as co-syndication agent and documentation agent, Wells Fargo, as co-syndication agent and Deutsche Bank Securities Inc. as joint lead arranger and joint bookrunner. In March 2016, Wells Fargo succeeded and was substituted for GE Capital as the administrative agent under the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement, among other things, (i) extends the maturity date of the Credit Facility from February 29, 2017 to May 21, 2019, (ii) increases the uncommitted incremental revolving capacity from $130 million to $150 million, (iii) permits a like-kind exchange program under Section 1031 of the Internal Revenue Code of 1986, as amended, (iv) provides that the unused commitment fee margin will be either 0.50%, 0.375% or 0.25%, depending on the ratio of the average of the daily closing balances of the aggregate revolving loans, swing line loans and letters of credit outstanding during each month to the aggregate commitments for the revolving loans, swing line loans and letters of credit, (v) lowers the interest rate (a) in the case of index rate revolving loans, to the index rate plus an applicable margin of 0.75% to 1.25% depending on the leverage ratio and (b) in the case of LIBOR revolving loans, to LIBOR plus an applicable margin of 1.75% to 2.25%, depending on the leverage ratio, (vi) lowers the margin applicable to the letter of credit fee to between 1.75% and 2.25%, depending on the leverage ratio, and (vii) permits, under certain conditions, for the payment of dividends and/or stock repurchases or redemptions on the capital stock of the Company of up to $75 million per calendar year and further additionally permits the payment of the special cash dividend of $7.00 per share previously declared by the Company on August 20, 2012 to the holders of outstanding restricted stock of the Company following the declared payment date with such permission not tied to the vesting of such restricted stock (which includes the Company’s payment in June 2014 of all amounts that remained payable to the holders of the restricted stock of the Company with respect to such special dividend that was otherwise payable following the applicable vesting dates in May and July 2014 and 2015). On February 5, 2015, we entered into an amendment of the Credit Facility which, among other things, increased the total amount of revolving loan commitments under the Amended and Restated Credit Agreement from $402.5 million to $602.5 million. As of June 30, 2017, we were in compliance with our financial covenants under the Credit Facility. At June 30, 2017, the Company could borrow up to an additional $429.9 million and remain in compliance with the debt covenants under the Company’s Credit Facility. At June 30, 2017, the interest rate on the Credit Facility was based on a 4.0% U.S. Prime Rate plus 100 basis points and LIBOR plus 200 basis points. The weighted average interest rate at June 30, 2017 was approximately 3.5%. At July 20, 2017, we had $424.4 million of available borrowings under our Credit Facility, net of $7.7 million of outstanding letters of credit. |
Senior Unsecured Notes
Senior Unsecured Notes | 6 Months Ended |
Jun. 30, 2017 | |
Unsecured Debt [Member] | |
Debt Instrument [Line Items] | |
Senior Secured Credit Facility | (8) Senior Unsecured Notes The following table reconciles our Senior Unsecured Notes to our Condensed Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2015 $ 627,306 Accretion of discount through December 31, 2016 1,055 Amortization of note premium through December 31, 2016 (887 ) Amortization of deferred financing costs through December 31, 2016 237 Balance at December 31, 2016 $ 627,711 Accretion of discount through June 30, 2017 528 Amortization of note premium through June 30, 2017 (444 ) Amortization of deferred financing costs through June 30, 2017 119 Balance at June 30, 2017 $ 627,914 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | (9) Segment Information We have identified five reportable segments: equipment rentals, new equipment sales, used equipment sales, parts sales and services revenues. These segments are based upon how management of the Company allocates resources and assesses performance. Non-segmented revenues and non-segmented costs relate to equipment support activities including transportation, hauling, parts freight and damage-waiver charges and are not allocated to the other reportable 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 June 30, Six Months Ended June 30, 2017 2016 2017 2016 Segment Revenues: Equipment rentals $ 118,370 $ 108,650 $ 225,687 $ 211,488 New equipment sales 45,669 49,893 79,943 107,072 Used equipment sales 24,106 23,769 52,969 51,343 Parts sales 27,969 26,654 53,300 54,623 Services revenues 15,944 16,945 31,024 33,246 Total segmented revenues 232,058 225,911 442,923 457,772 Non-segmented revenues 17,305 16,184 33,268 31,333 Total revenues $ 249,363 $ 242,095 $ 476,191 $ 489,105 Segment Gross Profit: Equipment rentals $ 56,370 $ 50,954 $ 104,410 $ 97,532 New equipment sales 5,219 5,362 9,112 12,067 Used equipment sales 7,104 6,894 16,106 15,956 Parts sales 7,611 7,441 14,729 15,147 Services revenues 10,612 10,955 20,693 21,955 Total segmented gross profit 86,916 81,606 165,050 162,657 Non-segmented gross profit (loss) 424 102 (38 ) 195 Total gross profit $ 87,340 $ 81,708 $ 165,012 $ 162,852 Balances at June 30, December 31, 2017 2016 Segment identified assets: Equipment sales $ 77,231 $ 37,912 Equipment rentals 902,378 893,816 Parts and services 17,171 15,997 Total segment identified assets 996,780 947,725 Non-segment identified assets 295,281 293,886 Total assets $ 1,292,061 $ 1,241,611 The Company operates primarily in the United States and our sales to international customers for the three month periods ended June 30, 2017 and 2016 were 0.1% and 0.3%, respectively, of total revenues. Our sales to international customers for the six month periods ended June 30, 2017 and 2016 were 0.4% and 0.5%, respectively, of total revenues. No one customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented. |
Condensed Consolidating Financi
Condensed Consolidating Financial Information of Guarantor Subsidiaries | 6 Months Ended |
Jun. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Financial Information of Guarantor Subsidiaries | (10) Condensed Consolidating Financial Information of Guarantor Subsidiaries All of the indebtedness of H&E Equipment Services, Inc. is guaranteed by GNE Investments, Inc. and its wholly‑owned subsidiary Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E California Holding, Inc., H&E Equipment Services (Mid-Atlantic), Inc. and H&E Finance Corp. The guarantor subsidiaries are all wholly‑owned and the guarantees, made on a joint and several basis, are full and unconditional (subject to subordination provisions and subject to a standard limitation which provides that the maximum amount guaranteed by each guarantor will not exceed the maximum amount that can be guaranteed without making the guarantee void under fraudulent conveyance laws). There are no restrictions on H&E Equipment Services, Inc.’s ability to obtain funds from the guarantor subsidiaries by dividend or loan. The consolidating financial statements of H&E Equipment Services, Inc. and its subsidiaries are included below. The financial statements for H&E Finance Corp. are not included within the consolidating financial statements because H&E Finance Corp. has no assets or operations. CONDENSED CONSOLIDATING BALANCE SHEET As of June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 6,995 $ — $ — $ 6,995 Receivables, net 113,323 28,152 — 141,475 Inventories, net 78,733 15,669 — 94,402 Prepaid expenses and other assets 9,203 221 — 9,424 Rental equipment, net 746,342 156,036 — 902,378 Property and equipment, net 93,476 11,156 — 104,632 Deferred financing costs, net 1,558 — — 1,558 Investment in guarantor subsidiaries 231,555 — (231,555 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,282,856 $ 240,760 $ (231,555 ) $ 1,292,061 Liabilities and Stockholders’ Equity: Amounts due on senior secured credit facility $ 164,852 $ — $ — $ 164,852 Accounts payable 73,912 7,141 — 81,053 Manufacturer flooring plans payable 24,233 1,591 — 25,824 Accrued expenses payable and other liabilities 61,801 (1,081 ) — 60,720 Dividends payable 132 (43 ) — 89 Senior unsecured notes 627,914 — — 627,914 Capital leases payable — 1,597 — 1,597 Deferred income taxes 186,922 — — 186,922 Deferred compensation payable 1,869 — — 1,869 Total liabilities 1,141,635 9,205 — 1,150,840 Stockholders’ equity 141,221 231,555 (231,555 ) 141,221 Total liabilities and stockholders’ equity $ 1,282,856 $ 240,760 $ (231,555 ) $ 1,292,061 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 7,683 $ — $ — $ 7,683 Receivables, net 112,758 27,279 — 140,037 Inventories, net 49,509 4,400 — 53,909 Prepaid expenses and other assets 7,343 170 — 7,513 Rental equipment, net 743,759 150,057 — 893,816 Property and equipment, net 93,866 11,626 — 105,492 Deferred financing costs, net 1,964 — — 1,964 Investment in guarantor subsidiaries 220,209 — (220,209 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,238,762 $ 223,058 $ (220,209 ) $ 1,241,611 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ 162,642 $ — $ — $ 162,642 Accounts payable 36,188 3,244 — 39,432 Manufacturer flooring plans payable 30,899 (119 ) — 30,780 Accrued expenses payable and other liabilities 58,774 (1,941 ) — 56,833 Dividends payable 106 (39 ) — 67 Senior unsecured notes 627,711 — — 627,711 Capital leases payable — 1,704 — 1,704 Deferred income taxes 177,835 — — 177,835 Deferred compensation payable 1,842 — — 1,842 Total liabilities 1,095,997 2,849 — 1,098,846 Stockholders’ equity 142,765 220,209 (220,209 ) 142,765 Total liabilities and stockholders’ equity $ 1,238,762 $ 223,058 $ (220,209 ) $ 1,241,611 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 96,709 $ 21,661 $ — $ 118,370 New equipment sales 38,819 6,850 — 45,669 Used equipment sales 19,333 4,773 — 24,106 Parts sales 23,970 3,999 — 27,969 Services revenues 13,395 2,549 — 15,944 Other 14,078 3,227 — 17,305 Total revenues 206,304 43,059 — 249,363 Cost of revenues: Rental depreciation 34,542 7,296 — 41,838 Rental expense 16,740 3,422 — 20,162 New equipment sales 34,315 6,135 — 40,450 Used equipment sales 14,056 2,946 — 17,002 Parts sales 17,527 2,831 — 20,358 Services revenues 4,479 853 — 5,332 Other 13,752 3,129 — 16,881 Total cost of revenues 135,411 26,612 — 162,023 Gross profit: Equipment rentals 45,427 10,943 — 56,370 New equipment sales 4,504 715 — 5,219 Used equipment sales 5,277 1,827 — 7,104 Parts sales 6,443 1,168 — 7,611 Services revenues 8,916 1,696 — 10,612 Other 326 98 — 424 Gross profit 70,893 16,447 — 87,340 Selling, general and administrative expenses 52,766 7,041 — 59,807 Equity in earnings of guarantor subsidiaries 3,769 — (3,769 ) — Gain on sales of property and equipment, net 905 230 — 1,135 Income from operations 22,801 9,636 (3,769 ) 28,668 Other income (expense): Interest expense (7,407 ) (5,966 ) — (13,373 ) Other, net 274 99 — 373 Total other expense, net (7,133 ) (5,867 ) — (13,000 ) Income before income taxes 15,668 3,769 (3,769 ) 15,668 Income tax expense 5,790 — — 5,790 Net income $ 9,878 $ 3,769 $ (3,769 ) $ 9,878 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 88,592 $ 20,058 $ — $ 108,650 New equipment sales 41,808 8,085 — 49,893 Used equipment sales 19,821 3,948 — 23,769 Parts sales 23,295 3,359 — 26,654 Services revenues 14,468 2,477 — 16,945 Other 13,121 3,063 — 16,184 Total revenues 201,105 40,990 — 242,095 Cost of revenues: Rental depreciation 32,831 6,844 — 39,675 Rental expense 14,960 3,061 — 18,021 New equipment sales 37,273 7,258 — 44,531 Used equipment sales 14,161 2,714 — 16,875 Parts sales 16,833 2,380 — 19,213 Services revenues 5,182 808 — 5,990 Other 13,106 2,976 — 16,082 Total cost of revenues 134,346 26,041 — 160,387 Gross profit: Equipment rentals 40,801 10,153 — 50,954 New equipment sales 4,535 827 — 5,362 Used equipment sales 5,660 1,234 — 6,894 Parts sales 6,462 979 — 7,441 Services revenues 9,286 1,669 — 10,955 Other 15 87 — 102 Gross profit 66,759 14,949 — 81,708 Selling, general and administrative expenses 46,989 10,060 — 57,049 Equity in earnings of guarantor subsidiaries 2,761 — (2,761 ) — Gain on sales of property and equipment, net 636 76 — 712 Income from operations 23,167 4,965 (2,761 ) 25,371 Other income (expense): Interest expense (11,084 ) (2,269 ) — (13,353 ) Other, net 624 65 — 689 Total other expense, net (10,460 ) (2,204 ) — (12,664 ) Income before income taxes 12,707 2,761 (2,761 ) 12,707 Income tax expense 5,204 — — 5,204 Net income $ 7,503 $ 2,761 $ (2,761 ) $ 7,503 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 184,992 $ 40,695 $ — $ 225,687 New equipment sales 68,494 11,449 — 79,943 Used equipment sales 42,474 10,495 — 52,969 Parts sales 45,701 7,599 — 53,300 Services revenues 26,090 4,934 — 31,024 Other 27,240 6,028 — 33,268 Total revenues 394,991 81,200 — 476,191 Cost of revenues: Rental depreciation 68,290 14,451 — 82,741 Rental expense 31,976 6,560 — 38,536 New equipment sales 60,685 10,146 — 70,831 Used equipment sales 30,155 6,708 — 36,863 Parts sales 33,217 5,354 — 38,571 Services revenues 8,690 1,641 — 10,331 Other 27,040 6,266 — 33,306 Total cost of revenues 260,053 51,126 — 311,179 Gross profit (loss): Equipment rentals 84,726 19,684 — 104,410 New equipment sales 7,809 1,303 — 9,112 Used equipment sales 12,319 3,787 — 16,106 Parts sales 12,484 2,245 — 14,729 Services revenues 17,400 3,293 — 20,693 Other 200 (238 ) — (38 ) Gross profit 134,938 30,074 — 165,012 Selling, general and administrative expenses 103,001 14,124 — 117,125 Equity in earnings of guarantor subsidiaries 4,981 — (4,981 ) — Gain on sales of property and equipment, net 1,629 477 — 2,106 Income from operations 38,547 16,427 (4,981 ) 49,993 Other income (expense): Interest expense (14,970 ) (11,635 ) — (26,605 ) Other, net 621 189 — 810 Total other expense, net (14,349 ) (11,446 ) — (25,795 ) Income before income taxes 24,198 4,981 (4,981 ) 24,198 Income tax expense 8,930 — — 8,930 Net income $ 15,268 $ 4,981 $ (4,981 ) $ 15,268 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 174,617 $ 36,871 $ — $ 211,488 New equipment sales 87,340 19,732 — 107,072 Used equipment sales 42,737 8,606 — 51,343 Parts sales 47,516 7,107 — 54,623 Services revenues 28,447 4,799 — 33,246 Other 25,547 5,786 — 31,333 Total revenues 406,204 82,901 — 489,105 Cost of revenues: Rental depreciation 65,944 13,228 — 79,172 Rental expense 29,008 5,776 — 34,784 New equipment sales 77,388 17,617 — 95,005 Used equipment sales 29,803 5,584 — 35,387 Parts sales 34,439 5,037 — 39,476 Services revenues 9,784 1,507 — 11,291 Other 25,353 5,785 — 31,138 Total cost of revenues 271,719 54,534 — 326,253 Gross profit: Equipment rentals 79,665 17,867 — 97,532 New equipment sales 9,952 2,115 — 12,067 Used equipment sales 12,934 3,022 — 15,956 Parts sales 13,077 2,070 — 15,147 Services revenues 18,663 3,292 — 21,955 Other 194 1 — 195 Gross profit 134,485 28,367 — 162,852 Selling, general and administrative expenses 96,591 19,832 — 116,423 Equity in earnings of guarantor subsidiaries 4,496 — (4,496 ) — Gain on sales of property and equipment, net 1,166 208 — 1,374 Income from operations 43,556 8,743 (4,496 ) 47,803 Other income (expense): Interest expense (22,386 ) (4,374 ) — (26,760 ) Other, net 992 127 — 1,119 Total other expense, net (21,394 ) (4,247 ) — (25,641 ) Income before income taxes 22,162 4,496 (4,496 ) 22,162 Income tax expense 9,085 — — 9,085 Net income $ 13,077 $ 4,496 $ (4,496 ) $ 13,077 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 15,268 $ 4,981 $ (4,981 ) $ 15,268 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 10,535 1,580 — 12,115 Depreciation of rental equipment 68,290 14,451 — 82,741 Amortization of deferred financing costs 526 — — 526 Accretion of note discount, net of premium amortization 84 — — 84 Provision for losses on accounts receivable 1,484 374 — 1,858 Provision for inventory obsolescence 71 — — 71 Change in deferred income taxes 9,968 — — 9,968 Stock-based compensation expense 1,894 — — 1,894 Gain from sales of property and equipment, net (1,629 ) (477 ) — (2,106 ) Gain from sales of rental equipment, net (11,595 ) (3,754 ) — (15,349 ) Equity in earnings of guarantor subsidiaries (4,981 ) — 4,981 — Changes in operating assets and liabilities: Receivables (2,027 ) (1,247 ) — (3,274 ) Inventories (36,815 ) (12,770 ) — (49,585 ) Prepaid expenses and other assets (1,860 ) (51 ) — (1,911 ) Accounts payable 37,724 3,897 — 41,621 Manufacturer flooring plans payable (6,666 ) 1,710 — (4,956 ) Accrued expenses payable and other liabilities 2,855 860 — 3,715 Deferred compensation payable 27 — — 27 Net cash provided by operating activities 83,153 9,554 — 92,707 Cash flows from investing activities: Purchases of property and equipment (10,915 ) (1,222 ) — (12,137 ) Purchases of rental equipment (87,518 ) (25,428 ) — (112,946 ) Proceeds from sales of property and equipment 2,548 589 — 3,137 Proceeds from sales of rental equipment 35,760 10,253 — 46,013 Investment in subsidiaries (6,365 ) — 6,365 — Net cash used in investing activities. (66,490 ) (15,808 ) 6,365 (75,933 ) Cash flows from financing activities: Borrowings on senior secured credit facility 484,252 — — 484,252 Payments on senior secured credit facility (482,042 ) — — (482,042 ) Dividends paid (19,561 ) (4 ) — (19,565 ) Payments on capital lease obligations — (107 ) — (107 ) Capital contributions — 6,365 (6,365 ) — Net cash provided by (used in) financing activities (17,351 ) 6,254 (6,365 ) (17,462 ) Net increase (decrease) in cash (688 ) — — (688 ) Cash, beginning of period 7,683 — — 7,683 Cash, end of period $ 6,995 $ — $ — $ 6,995 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 13,077 $ 4,496 $ (4,496 ) $ 13,077 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 11,952 1,512 — 13,464 Depreciation of rental equipment 65,944 13,228 — 79,172 Amortization of deferred financing costs 526 — — 526 Accretion of note discount, net of premium amortization 83 — — 83 Provision for losses on accounts receivable 1,979 29 — 2,008 Provision for inventory obsolescence 14 — — 14 Change in deferred income taxes 9,182 — — 9,182 Stock-based compensation expense 1,667 — — 1,667 Gain from sales of property and equipment, net (1,166 ) (208 ) — (1,374 ) Gain from sales of rental equipment, net (12,481 ) (2,986 ) — (15,467 ) Equity in earnings of guarantor subsidiaries (4,496 ) — 4,496 — Changes in operating assets and liabilities: Receivables 10,639 (3,529 ) — 7,110 Inventories (38,755 ) (13,712 ) — (52,467 ) Prepaid expenses and other assets 547 (58 ) — 489 Accounts payable 14,511 7,811 — 22,322 Manufacturer flooring plans payable (16,466 ) — — (16,466 ) Accrued expenses payable and other liabilities 3,855 745 — 4,600 Deferred compensation payable (363 ) — — (363 ) Net cash provided by operating activities 60,249 7,328 — 67,577 Cash flows from investing activities: Purchases of property and equipment (9,903 ) (1,562 ) — (11,465 ) Purchases of rental equipment (44,643 ) (24,501 ) — (69,144 ) Proceeds from sales of property and equipment 1,417 266 — 1,683 Proceeds from sales of rental equipment 36,342 8,159 — 44,501 Investment in subsidiaries (10,414 ) — 10,414 — Net cash used in investing activities. (27,201 ) (17,638 ) 10,414 (34,425 ) Cash flows from financing activities: Borrowings on senior secured credit facility 482,513 — — 482,513 Payments on senior secured credit facility (492,866 ) — — (492,866 ) Dividends paid (19,501 ) (4 ) — (19,505 ) Payments on capital lease obligations — (100 ) — (100 ) Capital contributions — 10,414 (10,414 ) — Net cash provided by (used in) financing activities (29,854 ) 10,310 (10,414 ) (29,958 ) Net increase in cash 3,194 — — 3,194 Cash, beginning of period 7,159 — — 7,159 Cash, end of period $ 10,353 $ — $ — $ 10,353 |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | (11) Subsequent Events On July 14, 2017, the Company, the Company’s newly-formed, wholly-owned subsidiary Yellow Iron Merger Co. and Neff Corporation (“Neff”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) under which, and upon the terms and subject to the conditions of, the Company will acquire Neff. Under the terms of the Merger Agreement, at the effective time of the merger the Company will pay $21.07 in cash per share of Neff’s Class A common stock (subject to the adjustment described in the subsequent sentence) (the “Merger Consideration”), for a total enterprise value of approximately $1.2 billion, including $690 million of net debt (debt less cash and cash equivalents). The per share merger consideration payable to Neff stockholders is subject to certain downward adjustment, not to exceed $0.44 per share, in the event that the Company incurs certain increased financing costs due to the transaction not being consummated on or prior to January 14, 2018. In addition, each outstanding, unvested stock option and restricted stock unit in respect of Neff’s Class A common stock will be converted into the right to receive Company common stock on substantially similar terms, while each outstanding, vested stock option and restricted stock unit will be entitled to receive an amount in cash based upon the Merger Consideration. In connection with entering into the Merger Agreement, the Company also entered into a support agreement with Neff’s largest stockholders, Wayzata Opportunities Fund II, L.P. and Wayzata Opportunities Fund Offshore II, L.P. (collectively, “Wayzata”), pursuant to which Wayzata delivered a written consent approving and adopting the Merger Agreement concurrently with the parties execution thereof, as well as exchange and termination agreements with each of Wayzata and the other holders of securities of Neff Holdings, LLC, Neff’s wholly-owned subsidiary, in order to collapse Neff’s holding company structure in advance of the consummation of the proposed merger. The transaction is expected to close in the late third quarter or early fourth quarter of 2017, and is subject to customary closing conditions including Hart-Scott-Rodino Act clearance, as well as a “go-shop” period in favor of Neff Corporation, which period will expire at 11:59 p.m. on August 20, 2017. The Company intends to fund the consideration to be paid pursuant to the terms of the Merger Agreement, as well as the fees, commissions and expenses related to the transactions contemplated thereby, through a combination of some or all of the following: • Availability under a new $1.25 billion senior secured asset-based revolving credit facility (the “ABL Facility”); • The issuance and sale of up to $575 million (which may be increased to up to $825 million, if the proposed equity offering described below is not consummated in full or at all) of senior unsecured notes of the Company in a private placement (the “Proposed Notes Offering”); and • The issuance and sale of up to $250 million of the Company’s common stock in a public offering or private placement (the “Proposed Equity Offering,” and collectively with the ABL Facility and the Proposed Notes Offering, the “Proposed Financing”). The Company also intends to use a portion of the proceeds of the Proposed Financing to refinance certain existing indebtedness of the Company and Neff, including existing senior secured credit facilities. Subject to market conditions, the Company may seek to refinance its existing 7% senior unsecured notes due 2022 in the aggregate principal amount of $630 million. The Proposed Equity Offering and Proposed Notes Offering are each subject to market and other conditions, and the Proposed Financing is contingent on the satisfaction of certain customary conditions. In connection with its entry into the Merger Agreement, on July 14, 2017, the Company entered into a Commitment Letter (the “Commitment Letter”) with Wells Fargo Bank, National Association (“Wells Fargo Bank”), WF Investment Holdings, LLC (“WFIH”) and Wells Fargo Securities, LLC (collectively with Wells Fargo Bank and WFIH, “Wells Fargo”), pursuant to which Wells Fargo has committed to provide 100% of the ABL Facility and 100% of the principal amount of a senior unsecured bridge facility (the “Bridge Facility”) in an amount up to $825 million. The Commitment Letter contemplates that the Company will undertake the Proposed Notes Offering and the Proposed Equity Offering, and the commitment under the Bridge Facility will be reduced, on a dollar-for-dollar basis, by the amount of aggregate proceeds, if any, from the Proposed Notes Offering and Proposed Equity Offering. Funding of the financing under the Commitment Letter is contingent on the satisfaction or waiver of certain conditions set forth therein. The ABL Facility is expected to contain a springing minimum fixed charge coverage ratio covenant and other customary negative and affirmative covenants and representations and warranties. The Bridge Facility is also expected to contain customary affirmative and negative covenants and representations and warranties. The respective obligations of Wells Fargo Bank and WFIH to provide the Credit Facilities are subject to customary conditions, including, without limitation, execution and delivery of definitive documentation consistent with the Commitment Letter and the documentation standards specified therein. Under certain conditions Wells Fargo has the right to exercise a securities demand which requires the Company to accept an issuance, at then current market terms, of up to $825 million in unsecured debt securities in order to close the transaction. Wells Fargo or its affiliates from time to time have provided in the past and may provide in the future investment banking, commercial lending and financial advisory services to the Company and its affiliates in the ordinary course of business, and has received, and may in the future receive, customary fees for such transactions and services. For additional information on the Merger Agreement, please see the Company’s Current Report on Form 8-K filed with the Securities & Exchange Commission on July 14, 2017. |
Organization and Nature of Op17
Organization and Nature of Operations (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [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 and H&E Equipment Services (Mid-Atlantic), Inc., collectively referred to herein as “we” or “us” or “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 six month periods ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017, 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, 2016, from which the consolidated balance sheet amounts as of December 31, 2016 were derived. All significant intercompany accounts and transactions have been eliminated in these condensed consolidated financial statements. The nature of our business is such that short-term obligations are typically met by cash flows generated from long-term assets. Consequently, and consistent with industry practice, the accompanying condensed consolidated balance sheets are presented on an unclassified basis. |
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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers Revenue Recognition Revenues from equipment rentals accounted for 47.4% of our total revenues for the six months ended June 30, 2017. We believe the accounting for equipment rental revenues is outside the scope of ASU 2014-09. Upon adoption of ASU 2014-09, revenues from equipment rentals will be accounted for pursuant to current lease accounting guidance until our adoption of the new lease accounting standard as further discussed in the subsequent paragraph below. Revenues from new and used equipment sales, parts and services revenues and other revenues are subject to ASU 2014-09 upon adoption. We have reviewed the accounting for sales of new and used equipment, which accounted for 27.9% of our total revenues for the six months ended June 30, 2017, and do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. Parts revenues, services revenues and other revenues comprised the remaining 24.7% of our total revenues for the six months ended June 30, 2017. The impact of ASU 2014-09 on these revenues is not currently estimable. Our review of this standard, including our evaluation of the available transition methods and the impact of the standard on our internal controls over financial reporting, is ongoing. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Our operating leases include the real estate where all but 11 of our 78 branch locations are located as of June 30, 2017. Additionally, the Company leases numerous types of non-rental equipment. We have begun accumulating the information related to these leases and expect that the quantification of the amount of the lease assets and lease liabilities that we will recognize on our consolidated balance sheet upon adoption of ASU 2016-02 will take significant time given the size of our lease portfolio. We are also concurrently evaluating our internal processes and controls over financial reporting with respect to the impact that the new lease standard will have on our lease administration activities. As mentioned in the ASU 2014-09 discussion above, our equipment rental business involves rental agreements with customers whereby we are the lessor in the transaction and therefore, we believe that such transactions are subject to the lessor accounting guidance of ASU 2016-02. Our evaluation of ASU 2016-02 is ongoing and the impact that this new guidance will have on our consolidated financial statements, as well as our internal controls over financial reporting, is not currently estimable. In June 2016, the FASB issued ASU 2016-13, “ Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2016, the FASB issued ASU No. 2016-15, Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment Recent Accounting Pronouncements Adopted in the First Quarter of 2017 In July 2015, the FASB issued ASU 2015-11, Inventory: Simplifying the Measurement of Inventory In March 2016, the FASB Issued ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting ASU 2016-09 eliminates the prior guidance requirement that allowed under certain circumstances the realization of excess tax benefits prior to recognition of those excess tax benefits. Under prior guidance, companies could not recognize excess tax benefits when an option was exercised or a share vested if the related tax deduction increased a net operating loss carryforward rather than reduced income taxes payable. ASU 2016-09 requires companies to apply this part of the guidance using a modified retrospective transition method and record a cumulative effect adjustment for previously unrecognized excess tax benefits. Accordingly, we recorded a cumulative effect adjustment to accumulated deficit as of January 1, 2017 of approximately $0.9 million for all excess tax benefits that had not been previously recognized because the related tax deduction had not reduced income taxes payable. ASU 2016-09 also clarifies that an entity should classify excess tax benefits along with other income tax cash flows as an operating activity in the statement of cash flows. This change eliminates the prior practice of grossing up the statement of cash flows for the effect of windfalls, i.e. reporting windfalls as outflows in operating activities and as inflows in financing activities. Under ASU 2016-09, the effect of windfalls will generally be reflected in net income from continuing operations under the indirect method. We have adopted this portion of the guidance on a retrospective basis. ASU 2016-09 also clarifies that employee taxes paid when an employer withholds shares of stock for tax withholding purposes be reported as financing activities in the consolidated statements of cash flows, which is how the Company has historically presented such activities in our statement of cash flows. We have elected to continue to estimate the number of stock-based awards expected to vest, as permitted by ASU 2016-09, rather than electing to account for forfeitures as they occur. Additional amendments to the accounting for statutory withholding tax requirements had no impact on our consolidated financial statements. |
Fair Value of Financial Instr18
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 June 30, 2017 and December 31, 2016 are presented in the table below (amounts in thousands) and have been calculated based upon market quotes and present value calculations based on market rates. June 30, 2017 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 25,824 $ 22,149 Senior unsecured notes with interest computed at 7.0% (Level 1) 627,914 655,200 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,597 1,160 Letter of credit (Level 3) — 155 December 31, 2016 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 30,780 $ 26,780 Senior unsecured notes with interest computed at 7.0% (Level 1) 627,711 663,075 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,704 1,164 Letter of credit (Level 3) — 155 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Summary of Activity in Stockholders' Equity | The following table summarizes the activity in Stockholders’ Equity for the six month period ended June 30, 2017 (amounts in thousands, except share data): Common Stock Additional Retained Total Shares Issued Amount Paid-in Capital Treasury Stock Earnings (Deficit) Stockholders’ Equity Balances at December 31, 2016 39,496,759 $ 394 $ 223,544 $ (60,966 ) $ (20,207 ) $ 142,765 Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 (see note (2)) — — — — 881 881 Stock-based compensation — — 1,894 — — 1,894 Cash dividends declared on common stock ($0.275 per share) — — — — (19,587 ) (19,587 ) Issuance of common stock 16,215 — — — — — Net income — — — — 15,268 15,268 Balances at June 30, 2017 39,512,974 $ 394 $ 225,438 $ (60,966 ) $ (23,645 ) $ 141,221 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Schedule of Non-Vested Stock Activity | The following table summarizes our non-vested stock activity for the six months ended June 30, 2017: Number of Shares Weighted Average Grant Date Fair Non-vested stock at December 31, 2016 400,801 $ 18.86 Granted 21,658 $ 25.86 Vested (21,658 ) $ 25.86 Forfeited (5,443 ) $ 18.95 Non-vested stock at June 30, 2017 395,358 $ 18.86 |
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 six months ended June 30, 2017 and 2016 (amounts in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2017 2016 2017 2016 Compensation expense $ 713 $ 626 $ 1,894 $ 1,667 |
Schedule of Share Based Compensation Stock Options Activity | The following table represents stock option activity for the six months ended June 30, 2017: Number of Shares Weighted Average Exercise Price Weighted Average Contractual Life In Years Outstanding options at December 31, 2016 4,500 $ 19.27 Granted — — Exercised — — Canceled, forfeited or expired (4,500 ) $ 19.27 Outstanding options at June 30, 2017 — — — Options exercisable at June 30, 2017 — — — |
Income per Share (Tables)
Income per Share (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
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 six months ended June 30, 2017 and 2016 (amounts in thousands, except per share amounts): Three Months Ended Six Months Ended June 30, June 30, 2017 2016 2017 2016 Basic net income per share: Net income $ 9,878 $ 7,503 $ 15,268 $ 13,077 Weighted average number of common shares outstanding 35,473 35,354 35,469 35,347 Net income per share of common stock – basic $ 0.28 $ 0.21 $ 0.43 $ 0.37 Diluted net income per share: Net income $ 9,878 $ 7,503 $ 15,268 $ 13,077 Weighted average number of common shares outstanding 35,473 35,354 35,469 35,347 Effect of dilutive securities: Effect of dilutive stock options — — — — Effect of dilutive non-vested restricted stock 158 126 157 92 Weighted average number of common shares outstanding – diluted 35,631 35,480 35,626 35,439 Net income per share of common stock – diluted $ 0.28 $ 0.21 $ 0.43 $ 0.37 Common shares excluded from the denominator as anti-dilutive: Stock options — 1 — 7 Non-vested restricted stock — — — 4 |
Senior Unsecured Notes (Tables)
Senior Unsecured Notes (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Unsecured Debt [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, 2015 $ 627,306 Accretion of discount through December 31, 2016 1,055 Amortization of note premium through December 31, 2016 (887 ) Amortization of deferred financing costs through December 31, 2016 237 Balance at December 31, 2016 $ 627,711 Accretion of discount through June 30, 2017 528 Amortization of note premium through June 30, 2017 (444 ) Amortization of deferred financing costs through June 30, 2017 119 Balance at June 30, 2017 $ 627,914 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Information about Reportable Segments | The following table presents information about our reportable segments (amounts in thousands): Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Segment Revenues: Equipment rentals $ 118,370 $ 108,650 $ 225,687 $ 211,488 New equipment sales 45,669 49,893 79,943 107,072 Used equipment sales 24,106 23,769 52,969 51,343 Parts sales 27,969 26,654 53,300 54,623 Services revenues 15,944 16,945 31,024 33,246 Total segmented revenues 232,058 225,911 442,923 457,772 Non-segmented revenues 17,305 16,184 33,268 31,333 Total revenues $ 249,363 $ 242,095 $ 476,191 $ 489,105 Segment Gross Profit: Equipment rentals $ 56,370 $ 50,954 $ 104,410 $ 97,532 New equipment sales 5,219 5,362 9,112 12,067 Used equipment sales 7,104 6,894 16,106 15,956 Parts sales 7,611 7,441 14,729 15,147 Services revenues 10,612 10,955 20,693 21,955 Total segmented gross profit 86,916 81,606 165,050 162,657 Non-segmented gross profit (loss) 424 102 (38 ) 195 Total gross profit $ 87,340 $ 81,708 $ 165,012 $ 162,852 Balances at June 30, December 31, 2017 2016 Segment identified assets: Equipment sales $ 77,231 $ 37,912 Equipment rentals 902,378 893,816 Parts and services 17,171 15,997 Total segment identified assets 996,780 947,725 Non-segment identified assets 295,281 293,886 Total assets $ 1,292,061 $ 1,241,611 |
Condensed Consolidating Finan24
Condensed Consolidating Financial Information of Guarantor Subsidiaries (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET As of June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 6,995 $ — $ — $ 6,995 Receivables, net 113,323 28,152 — 141,475 Inventories, net 78,733 15,669 — 94,402 Prepaid expenses and other assets 9,203 221 — 9,424 Rental equipment, net 746,342 156,036 — 902,378 Property and equipment, net 93,476 11,156 — 104,632 Deferred financing costs, net 1,558 — — 1,558 Investment in guarantor subsidiaries 231,555 — (231,555 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,282,856 $ 240,760 $ (231,555 ) $ 1,292,061 Liabilities and Stockholders’ Equity: Amounts due on senior secured credit facility $ 164,852 $ — $ — $ 164,852 Accounts payable 73,912 7,141 — 81,053 Manufacturer flooring plans payable 24,233 1,591 — 25,824 Accrued expenses payable and other liabilities 61,801 (1,081 ) — 60,720 Dividends payable 132 (43 ) — 89 Senior unsecured notes 627,914 — — 627,914 Capital leases payable — 1,597 — 1,597 Deferred income taxes 186,922 — — 186,922 Deferred compensation payable 1,869 — — 1,869 Total liabilities 1,141,635 9,205 — 1,150,840 Stockholders’ equity 141,221 231,555 (231,555 ) 141,221 Total liabilities and stockholders’ equity $ 1,282,856 $ 240,760 $ (231,555 ) $ 1,292,061 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 7,683 $ — $ — $ 7,683 Receivables, net 112,758 27,279 — 140,037 Inventories, net 49,509 4,400 — 53,909 Prepaid expenses and other assets 7,343 170 — 7,513 Rental equipment, net 743,759 150,057 — 893,816 Property and equipment, net 93,866 11,626 — 105,492 Deferred financing costs, net 1,964 — — 1,964 Investment in guarantor subsidiaries 220,209 — (220,209 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,238,762 $ 223,058 $ (220,209 ) $ 1,241,611 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ 162,642 $ — $ — $ 162,642 Accounts payable 36,188 3,244 — 39,432 Manufacturer flooring plans payable 30,899 (119 ) — 30,780 Accrued expenses payable and other liabilities 58,774 (1,941 ) — 56,833 Dividends payable 106 (39 ) — 67 Senior unsecured notes 627,711 — — 627,711 Capital leases payable — 1,704 — 1,704 Deferred income taxes 177,835 — — 177,835 Deferred compensation payable 1,842 — — 1,842 Total liabilities 1,095,997 2,849 — 1,098,846 Stockholders’ equity 142,765 220,209 (220,209 ) 142,765 Total liabilities and stockholders’ equity $ 1,238,762 $ 223,058 $ (220,209 ) $ 1,241,611 |
Condensed Consolidating Statement of Income | CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 96,709 $ 21,661 $ — $ 118,370 New equipment sales 38,819 6,850 — 45,669 Used equipment sales 19,333 4,773 — 24,106 Parts sales 23,970 3,999 — 27,969 Services revenues 13,395 2,549 — 15,944 Other 14,078 3,227 — 17,305 Total revenues 206,304 43,059 — 249,363 Cost of revenues: Rental depreciation 34,542 7,296 — 41,838 Rental expense 16,740 3,422 — 20,162 New equipment sales 34,315 6,135 — 40,450 Used equipment sales 14,056 2,946 — 17,002 Parts sales 17,527 2,831 — 20,358 Services revenues 4,479 853 — 5,332 Other 13,752 3,129 — 16,881 Total cost of revenues 135,411 26,612 — 162,023 Gross profit: Equipment rentals 45,427 10,943 — 56,370 New equipment sales 4,504 715 — 5,219 Used equipment sales 5,277 1,827 — 7,104 Parts sales 6,443 1,168 — 7,611 Services revenues 8,916 1,696 — 10,612 Other 326 98 — 424 Gross profit 70,893 16,447 — 87,340 Selling, general and administrative expenses 52,766 7,041 — 59,807 Equity in earnings of guarantor subsidiaries 3,769 — (3,769 ) — Gain on sales of property and equipment, net 905 230 — 1,135 Income from operations 22,801 9,636 (3,769 ) 28,668 Other income (expense): Interest expense (7,407 ) (5,966 ) — (13,373 ) Other, net 274 99 — 373 Total other expense, net (7,133 ) (5,867 ) — (13,000 ) Income before income taxes 15,668 3,769 (3,769 ) 15,668 Income tax expense 5,790 — — 5,790 Net income $ 9,878 $ 3,769 $ (3,769 ) $ 9,878 CONDENSED CONSOLIDATING STATEMENT OF INCOME Three Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 88,592 $ 20,058 $ — $ 108,650 New equipment sales 41,808 8,085 — 49,893 Used equipment sales 19,821 3,948 — 23,769 Parts sales 23,295 3,359 — 26,654 Services revenues 14,468 2,477 — 16,945 Other 13,121 3,063 — 16,184 Total revenues 201,105 40,990 — 242,095 Cost of revenues: Rental depreciation 32,831 6,844 — 39,675 Rental expense 14,960 3,061 — 18,021 New equipment sales 37,273 7,258 — 44,531 Used equipment sales 14,161 2,714 — 16,875 Parts sales 16,833 2,380 — 19,213 Services revenues 5,182 808 — 5,990 Other 13,106 2,976 — 16,082 Total cost of revenues 134,346 26,041 — 160,387 Gross profit: Equipment rentals 40,801 10,153 — 50,954 New equipment sales 4,535 827 — 5,362 Used equipment sales 5,660 1,234 — 6,894 Parts sales 6,462 979 — 7,441 Services revenues 9,286 1,669 — 10,955 Other 15 87 — 102 Gross profit 66,759 14,949 — 81,708 Selling, general and administrative expenses 46,989 10,060 — 57,049 Equity in earnings of guarantor subsidiaries 2,761 — (2,761 ) — Gain on sales of property and equipment, net 636 76 — 712 Income from operations 23,167 4,965 (2,761 ) 25,371 Other income (expense): Interest expense (11,084 ) (2,269 ) — (13,353 ) Other, net 624 65 — 689 Total other expense, net (10,460 ) (2,204 ) — (12,664 ) Income before income taxes 12,707 2,761 (2,761 ) 12,707 Income tax expense 5,204 — — 5,204 Net income $ 7,503 $ 2,761 $ (2,761 ) $ 7,503 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 184,992 $ 40,695 $ — $ 225,687 New equipment sales 68,494 11,449 — 79,943 Used equipment sales 42,474 10,495 — 52,969 Parts sales 45,701 7,599 — 53,300 Services revenues 26,090 4,934 — 31,024 Other 27,240 6,028 — 33,268 Total revenues 394,991 81,200 — 476,191 Cost of revenues: Rental depreciation 68,290 14,451 — 82,741 Rental expense 31,976 6,560 — 38,536 New equipment sales 60,685 10,146 — 70,831 Used equipment sales 30,155 6,708 — 36,863 Parts sales 33,217 5,354 — 38,571 Services revenues 8,690 1,641 — 10,331 Other 27,040 6,266 — 33,306 Total cost of revenues 260,053 51,126 — 311,179 Gross profit (loss): Equipment rentals 84,726 19,684 — 104,410 New equipment sales 7,809 1,303 — 9,112 Used equipment sales 12,319 3,787 — 16,106 Parts sales 12,484 2,245 — 14,729 Services revenues 17,400 3,293 — 20,693 Other 200 (238 ) — (38 ) Gross profit 134,938 30,074 — 165,012 Selling, general and administrative expenses 103,001 14,124 — 117,125 Equity in earnings of guarantor subsidiaries 4,981 — (4,981 ) — Gain on sales of property and equipment, net 1,629 477 — 2,106 Income from operations 38,547 16,427 (4,981 ) 49,993 Other income (expense): Interest expense (14,970 ) (11,635 ) — (26,605 ) Other, net 621 189 — 810 Total other expense, net (14,349 ) (11,446 ) — (25,795 ) Income before income taxes 24,198 4,981 (4,981 ) 24,198 Income tax expense 8,930 — — 8,930 Net income $ 15,268 $ 4,981 $ (4,981 ) $ 15,268 CONDENSED CONSOLIDATING STATEMENT OF INCOME Six Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 174,617 $ 36,871 $ — $ 211,488 New equipment sales 87,340 19,732 — 107,072 Used equipment sales 42,737 8,606 — 51,343 Parts sales 47,516 7,107 — 54,623 Services revenues 28,447 4,799 — 33,246 Other 25,547 5,786 — 31,333 Total revenues 406,204 82,901 — 489,105 Cost of revenues: Rental depreciation 65,944 13,228 — 79,172 Rental expense 29,008 5,776 — 34,784 New equipment sales 77,388 17,617 — 95,005 Used equipment sales 29,803 5,584 — 35,387 Parts sales 34,439 5,037 — 39,476 Services revenues 9,784 1,507 — 11,291 Other 25,353 5,785 — 31,138 Total cost of revenues 271,719 54,534 — 326,253 Gross profit: Equipment rentals 79,665 17,867 — 97,532 New equipment sales 9,952 2,115 — 12,067 Used equipment sales 12,934 3,022 — 15,956 Parts sales 13,077 2,070 — 15,147 Services revenues 18,663 3,292 — 21,955 Other 194 1 — 195 Gross profit 134,485 28,367 — 162,852 Selling, general and administrative expenses 96,591 19,832 — 116,423 Equity in earnings of guarantor subsidiaries 4,496 — (4,496 ) — Gain on sales of property and equipment, net 1,166 208 — 1,374 Income from operations 43,556 8,743 (4,496 ) 47,803 Other income (expense): Interest expense (22,386 ) (4,374 ) — (26,760 ) Other, net 992 127 — 1,119 Total other expense, net (21,394 ) (4,247 ) — (25,641 ) Income before income taxes 22,162 4,496 (4,496 ) 22,162 Income tax expense 9,085 — — 9,085 Net income $ 13,077 $ 4,496 $ (4,496 ) $ 13,077 |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2017 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 15,268 $ 4,981 $ (4,981 ) $ 15,268 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 10,535 1,580 — 12,115 Depreciation of rental equipment 68,290 14,451 — 82,741 Amortization of deferred financing costs 526 — — 526 Accretion of note discount, net of premium amortization 84 — — 84 Provision for losses on accounts receivable 1,484 374 — 1,858 Provision for inventory obsolescence 71 — — 71 Change in deferred income taxes 9,968 — — 9,968 Stock-based compensation expense 1,894 — — 1,894 Gain from sales of property and equipment, net (1,629 ) (477 ) — (2,106 ) Gain from sales of rental equipment, net (11,595 ) (3,754 ) — (15,349 ) Equity in earnings of guarantor subsidiaries (4,981 ) — 4,981 — Changes in operating assets and liabilities: Receivables (2,027 ) (1,247 ) — (3,274 ) Inventories (36,815 ) (12,770 ) — (49,585 ) Prepaid expenses and other assets (1,860 ) (51 ) — (1,911 ) Accounts payable 37,724 3,897 — 41,621 Manufacturer flooring plans payable (6,666 ) 1,710 — (4,956 ) Accrued expenses payable and other liabilities 2,855 860 — 3,715 Deferred compensation payable 27 — — 27 Net cash provided by operating activities 83,153 9,554 — 92,707 Cash flows from investing activities: Purchases of property and equipment (10,915 ) (1,222 ) — (12,137 ) Purchases of rental equipment (87,518 ) (25,428 ) — (112,946 ) Proceeds from sales of property and equipment 2,548 589 — 3,137 Proceeds from sales of rental equipment 35,760 10,253 — 46,013 Investment in subsidiaries (6,365 ) — 6,365 — Net cash used in investing activities. (66,490 ) (15,808 ) 6,365 (75,933 ) Cash flows from financing activities: Borrowings on senior secured credit facility 484,252 — — 484,252 Payments on senior secured credit facility (482,042 ) — — (482,042 ) Dividends paid (19,561 ) (4 ) — (19,565 ) Payments on capital lease obligations — (107 ) — (107 ) Capital contributions — 6,365 (6,365 ) — Net cash provided by (used in) financing activities (17,351 ) 6,254 (6,365 ) (17,462 ) Net increase (decrease) in cash (688 ) — — (688 ) Cash, beginning of period 7,683 — — 7,683 Cash, end of period $ 6,995 $ — $ — $ 6,995 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Six Months Ended June 30, 2016 H&E Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 13,077 $ 4,496 $ (4,496 ) $ 13,077 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 11,952 1,512 — 13,464 Depreciation of rental equipment 65,944 13,228 — 79,172 Amortization of deferred financing costs 526 — — 526 Accretion of note discount, net of premium amortization 83 — — 83 Provision for losses on accounts receivable 1,979 29 — 2,008 Provision for inventory obsolescence 14 — — 14 Change in deferred income taxes 9,182 — — 9,182 Stock-based compensation expense 1,667 — — 1,667 Gain from sales of property and equipment, net (1,166 ) (208 ) — (1,374 ) Gain from sales of rental equipment, net (12,481 ) (2,986 ) — (15,467 ) Equity in earnings of guarantor subsidiaries (4,496 ) — 4,496 — Changes in operating assets and liabilities: Receivables 10,639 (3,529 ) — 7,110 Inventories (38,755 ) (13,712 ) — (52,467 ) Prepaid expenses and other assets 547 (58 ) — 489 Accounts payable 14,511 7,811 — 22,322 Manufacturer flooring plans payable (16,466 ) — — (16,466 ) Accrued expenses payable and other liabilities 3,855 745 — 4,600 Deferred compensation payable (363 ) — — (363 ) Net cash provided by operating activities 60,249 7,328 — 67,577 Cash flows from investing activities: Purchases of property and equipment (9,903 ) (1,562 ) — (11,465 ) Purchases of rental equipment (44,643 ) (24,501 ) — (69,144 ) Proceeds from sales of property and equipment 1,417 266 — 1,683 Proceeds from sales of rental equipment 36,342 8,159 — 44,501 Investment in subsidiaries (10,414 ) — 10,414 — Net cash used in investing activities. (27,201 ) (17,638 ) 10,414 (34,425 ) Cash flows from financing activities: Borrowings on senior secured credit facility 482,513 — — 482,513 Payments on senior secured credit facility (492,866 ) — — (492,866 ) Dividends paid (19,501 ) (4 ) — (19,505 ) Payments on capital lease obligations — (100 ) — (100 ) Capital contributions — 10,414 (10,414 ) — Net cash provided by (used in) financing activities (29,854 ) 10,310 (10,414 ) (29,958 ) Net increase in cash 3,194 — — 3,194 Cash, beginning of period 7,159 — — 7,159 Cash, end of period $ 10,353 $ — $ — $ 10,353 |
Significant Accounting Polici25
Significant Accounting Policies - Additional Information (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2017USD ($)Location | Mar. 31, 2017USD ($) | Jun. 30, 2017USD ($)Location | Mar. 31, 2017USD ($) | Jan. 01, 2017USD ($) | |
Summary Of Significant Accounting Policy [Line Items] | |||||
Number of branch locations | Location | 78 | 78 | |||
Operating leases include real estate, number of branch location located | Location | 11 | 11 | |||
ASU 2016-09 [Member] | Retained Deficit [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Cumulative effect adjustment to accumulated deficit for excess tax benefits that had not been previously recognized | $ | $ 0.9 | ||||
Maximum [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Lease term | 12 months | ||||
Maximum [Member] | ASU 2016-09 [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Excess tax benefits recognized as discrete item in income tax expense | $ | $ 0.1 | $ 0.1 | $ 0.1 | $ 0.1 | |
Revenues [Member] | Product Concentration Risk [Member] | Equipment Rentals [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Percentage of revenue | 47.40% | ||||
Revenues [Member] | Product Concentration Risk [Member] | New and Used Equipment [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Percentage of revenue | 27.90% | ||||
Revenues [Member] | Product Concentration Risk [Member] | Parts Revenues, Services Revenues and Other Revenues [Member] | |||||
Summary Of Significant Accounting Policy [Line Items] | |||||
Percentage of revenue | 24.70% |
Fair Value of Financial Instr26
Fair Value of Financial Instruments - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 |
Level 3 [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) | $ 25,824 | $ 30,780 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 1,597 | 1,704 |
Level 3 [Member] | Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) | 22,149 | 26,780 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 1,160 | 1,164 |
Letter of credit (Level 3) | 155 | 155 |
Level 1 [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes with interest computed at 7.0% (Level 1) | 627,914 | 627,711 |
Level 1 [Member] | Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes with interest computed at 7.0% (Level 1) | $ 655,200 | $ 663,075 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Parenthetical) (Detail) | Jun. 30, 2017 | Dec. 31, 2016 |
Carrying Amount [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 4.50% | 4.50% |
Capital lease payable, interest rate, minimum | 5.929% | 5.929% |
Capital lease payable interest rate, maximum | 9.55% | 9.55% |
Carrying Amount [Member] | Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, interest rate | 7.00% | 7.00% |
Fair Value [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 4.50% | 4.50% |
Capital lease payable, interest rate, minimum | 5.929% | 5.929% |
Capital lease payable interest rate, maximum | 9.55% | 9.55% |
Fair Value [Member] | Level 1 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, interest rate | 7.00% | 7.00% |
Fair Value of Financial Instr28
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Fair Value Disclosures [Abstract] | ||||
Transfer of financial assets | $ 0 | $ 0 | $ 0 | $ 0 |
Transfer of financial liabilities | 0 | 0 | 0 | 0 |
Fair value, assets, level 1 to level 2 transfers, amount | 0 | 0 | 0 | 0 |
Fair value, assets, level 2 to level 1 transfers, amount | 0 | 0 | 0 | 0 |
Fair value, liabilities, level 1 to level 2 transfers, amount | 0 | 0 | 0 | 0 |
Fair value, liabilities, level 2 to level 1 transfers, amount | 0 | 0 | 0 | 0 |
Fair value asset transfers into level 3 | 0 | 0 | 0 | 0 |
Fair value asset, transfers out of level 3 | 0 | 0 | 0 | 0 |
Fair value liability, transfers into level 3 | 0 | 0 | 0 | 0 |
Fair value liability, transfers out of level 3 | $ 0 | $ 0 | $ 0 | $ 0 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Activity in Stockholders' Equity (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Capitalization, Equity [Line Items] | ||||
Beginning balance, value | $ 142,765 | |||
Beginning balance, shares | 39,496,759 | |||
Stock-based compensation | $ 1,894 | |||
Cash dividends declared on common stock ($0.275 per share) | (19,587) | |||
Net income | $ 9,878 | $ 7,503 | 15,268 | $ 13,077 |
Ending balance, value | $ 141,221 | $ 141,221 | ||
Ending balance, shares | 39,512,974 | 39,512,974 | ||
ASU 2016-09 [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 (see note (2)) | $ 881 | |||
Common Stock [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Beginning balance, value | $ 394 | |||
Beginning balance, shares | 39,496,759 | |||
Issuance of common stock, shares | 16,215 | |||
Ending balance, value | $ 394 | $ 394 | ||
Ending balance, shares | 39,512,974 | 39,512,974 | ||
Additional Paid-in Capital [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Beginning balance, value | $ 223,544 | |||
Stock-based compensation | 1,894 | |||
Ending balance, value | $ 225,438 | 225,438 | ||
Treasury Stock [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Beginning balance, value | (60,966) | |||
Ending balance, value | (60,966) | (60,966) | ||
Retained Earnings (Deficit) [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Beginning balance, value | (20,207) | |||
Cash dividends declared on common stock ($0.275 per share) | (19,587) | |||
Net income | 15,268 | |||
Ending balance, value | $ (23,645) | (23,645) | ||
Retained Earnings (Deficit) [Member] | ASU 2016-09 [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 (see note (2)) | $ 881 |
Stockholders' Equity - Summar30
Stockholders' Equity - Summary of Activity in Stockholders' Equity (Parenthetical) (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Schedule of Capitalization, Equity [Line Items] | ||||
Cash dividends declared on common stock, per share | $ 0.275 | $ 0.275 | $ 0.55 | $ 0.55 |
Retained Earnings (Deficit) [Member] | ||||
Schedule of Capitalization, Equity [Line Items] | ||||
Cash dividends declared on common stock, per share | $ 0.275 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2017USD ($)shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Unrecognized compensation expense related to non-vested stock | $ 3,400,000 |
Expected non-vested stock recognized over a weighted-average period | 1 year 10 months 24 days |
Unrecognized compensation expense related to stock option awards | $ 0 |
2016 Stock-Based Incentive Compensation Plan [Member] | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Stock-Based incentive compensation plan | shares | 1,960,574 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Non-Vested Stock Activity (Detail) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Non-vested stock, beginning balance, Number of Shares | shares | 400,801 |
Granted, Number of Shares | shares | 21,658 |
Vested, Number of Shares | shares | (21,658) |
Forfeited, Number of Shares | shares | (5,443) |
Non-vested stock, ending balance, Number of Shares | shares | 395,358 |
Non-vested stock, beginning balance, Weighted Average Grant Date Fair Value | $ / shares | $ 18.86 |
Granted, Weighted Average Grant Date Fair Value | $ / shares | 25.86 |
Vested, Weighted Average Grant Date Fair Value | $ / shares | 25.86 |
Forfeited, Weighted Average Grant Date Fair Value | $ / shares | 18.95 |
Non-vested stock, ending balance, Weighted Average Grant Date Fair Value | $ / shares | $ 18.86 |
Stock-Based Compensation - Sc33
Stock-Based Compensation - Schedule of Compensation Expense Related to Non-Vested Stock (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||
Compensation expense | $ 713 | $ 626 | $ 1,894 | $ 1,667 |
Stock-Based Compensation - Sc34
Stock-Based Compensation - Schedule of Share Based Compensation Stock Options Activity (Detail) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Options, Outstanding, Number of Shares, Beginning Balance | shares | 4,500 |
Stock Options, Canceled, forfeited or expired, Number of Shares | shares | (4,500) |
Stock Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ / shares | $ 19.27 |
Stock Options, Canceled, forfeited or expired, Weighted Average Exercise Price | $ / shares | $ 19.27 |
Stock Options, Outstanding, Weighted Average Contractual Life In Years | 0 years |
Stock Options, Exercisable, Weighted Average Contractual Life In Years | 0 years |
Income per Share - Additional I
Income per Share - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Earnings Per Share [Abstract] | ||||
Restricted common shares, percentage | 0.80% | 0.80% | 0.80% | 0.80% |
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 | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Basic net income per share: | ||||
Net income | $ 9,878 | $ 7,503 | $ 15,268 | $ 13,077 |
Weighted average number of common shares outstanding | 35,473 | 35,354 | 35,469 | 35,347 |
Net income per share of common stock – basic | $ 0.28 | $ 0.21 | $ 0.43 | $ 0.37 |
Diluted net income per share: | ||||
Net income | $ 9,878 | $ 7,503 | $ 15,268 | $ 13,077 |
Weighted average number of common shares outstanding | 35,473 | 35,354 | 35,469 | 35,347 |
Effect of dilutive securities: | ||||
Weighted average number of common shares outstanding - diluted | 35,631 | 35,480 | 35,626 | 35,439 |
Net income per share of common stock – diluted | $ 0.28 | $ 0.21 | $ 0.43 | $ 0.37 |
Stock Options [Member] | ||||
Common shares excluded from the denominator as anti-dilutive: | ||||
Common shares excluded from the denominator as anti-dilutive | 1 | 7 | ||
Non-vested restricted stock [Member] | ||||
Effect of dilutive securities: | ||||
Effect of dilutive stock options and non-vested restricted stock | 158 | 126 | 157 | 92 |
Common shares excluded from the denominator as anti-dilutive: | ||||
Common shares excluded from the denominator as anti-dilutive | 4 |
Senior Secured Credit Facility
Senior Secured Credit Facility - Additional Information (Detail) - USD ($) | 6 Months Ended | ||||
Jun. 30, 2017 | Jul. 20, 2017 | Feb. 05, 2015 | May 21, 2014 | May 20, 2014 | |
Debt Instrument [Line Items] | |||||
Unused commitment fee margin percentage | 0.375% | ||||
Payment of dividends and/or stock repurchases or redemptions | $ 75,000,000 | ||||
Weighted average interest rate on the senior secured credit facility | 3.50% | ||||
Basis points added to U S prime rate | 1.00% | ||||
Basis points added to LIBOR | 2.00% | ||||
Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding letters of credit | $ 7,700,000 | ||||
Non-vested Restricted Stock [Member] | |||||
Debt Instrument [Line Items] | |||||
Payment of special cash dividend per share previously declared by the Company | $ 7 | ||||
Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee margin percentage | 0.50% | ||||
Index rate plus an applicable margin Percentage | 1.25% | ||||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
LIBOR plus an applicable margin Percentage | 2.25% | ||||
Maximum [Member] | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Margin rate lowered in applicable to Letter of Credit | 2.25% | ||||
Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee margin percentage | 0.25% | ||||
Index rate plus an applicable margin Percentage | 0.75% | ||||
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
LIBOR plus an applicable margin Percentage | 1.75% | ||||
Minimum [Member] | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Margin rate lowered in applicable to Letter of Credit | 1.75% | ||||
Wells Fargo Capital Finance, LLC [Member] | Senior Secured Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 602,500,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 402,500,000 | ||||
Uncommitted incremental revolving capacity | $ 150,000,000 | $ 130,000,000 | |||
Debt instrument maturity date description | Extends the maturity date of the Credit Facility from February 29, 2017 to May 21, 2019 | ||||
Available borrowings under our senior secured credit facility | $ 429,900,000 | ||||
Debt instrument prime rate plus | 4.00% | ||||
Credit facility interest rate description | the interest rate on the Credit Facility was based on a 4.0% U.S. Prime Rate plus 100 basis points and LIBOR plus 200 basis points. | ||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Available borrowings under our senior secured credit facility | $ 424,400,000 | ||||
Amended and Restated Credit Agreement [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 602,500,000 |
Senior Unsecured Notes - Reconc
Senior Unsecured Notes - Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||
Senior unsecured notes, beginning balance | $ 627,711 | $ 627,306 | $ 627,306 |
Accretion of discount | 528 | 1,055 | |
Amortization of note premium | (444) | (887) | |
Amortization of deferred financing costs | 526 | $ 526 | |
Senior unsecured notes, ending balance | 627,914 | 627,711 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Amortization of deferred financing costs | $ 119 | $ 237 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017Customer | Jun. 30, 2016Customer | Jun. 30, 2017SegmentCustomer | Jun. 30, 2016Customer | |
Segment Reporting [Abstract] | ||||
Number of reportable segment | Segment | 5 | |||
Sales to international customers | 0.10% | 0.30% | 0.40% | 0.50% |
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 | 6 Months Ended | |||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Segment Revenues: | |||||
Revenues | $ 249,363 | $ 242,095 | $ 476,191 | $ 489,105 | |
Segment Gross Profit: | |||||
Total gross profit | 87,340 | 81,708 | 165,012 | 162,852 | |
Segment identified assets: | |||||
Total assets | 1,292,061 | 1,292,061 | $ 1,241,611 | ||
Operating Segments [Member] | |||||
Segment Revenues: | |||||
Revenues | 232,058 | 225,911 | 442,923 | 457,772 | |
Segment Gross Profit: | |||||
Total gross profit | 86,916 | 81,606 | 165,050 | 162,657 | |
Segment identified assets: | |||||
Total assets | 996,780 | 996,780 | 947,725 | ||
Operating Segments [Member] | Equipment Rentals [Member] | |||||
Segment Revenues: | |||||
Revenues | 118,370 | 108,650 | 225,687 | 211,488 | |
Segment Gross Profit: | |||||
Total gross profit | 56,370 | 50,954 | 104,410 | 97,532 | |
Segment identified assets: | |||||
Total assets | 902,378 | 902,378 | 893,816 | ||
Operating Segments [Member] | New Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 45,669 | 49,893 | 79,943 | 107,072 | |
Segment Gross Profit: | |||||
Total gross profit | 5,219 | 5,362 | 9,112 | 12,067 | |
Operating Segments [Member] | Used Equipment Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 24,106 | 23,769 | 52,969 | 51,343 | |
Segment Gross Profit: | |||||
Total gross profit | 7,104 | 6,894 | 16,106 | 15,956 | |
Segment identified assets: | |||||
Total assets | 77,231 | 77,231 | 37,912 | ||
Operating Segments [Member] | Parts Sales [Member] | |||||
Segment Revenues: | |||||
Revenues | 27,969 | 26,654 | 53,300 | 54,623 | |
Segment Gross Profit: | |||||
Total gross profit | 7,611 | 7,441 | 14,729 | 15,147 | |
Operating Segments [Member] | Services Revenues [Member] | |||||
Segment Revenues: | |||||
Revenues | 15,944 | 16,945 | 31,024 | 33,246 | |
Segment Gross Profit: | |||||
Total gross profit | 10,612 | 10,955 | 20,693 | 21,955 | |
Operating Segments [Member] | Parts and Services [Member] | |||||
Segment identified assets: | |||||
Total assets | 17,171 | 17,171 | 15,997 | ||
Non-Segmented [Member] | |||||
Segment Revenues: | |||||
Revenues | 17,305 | 16,184 | 33,268 | 31,333 | |
Segment Gross Profit: | |||||
Total gross profit | 424 | $ 102 | (38) | $ 195 | |
Segment identified assets: | |||||
Total assets | $ 295,281 | $ 295,281 | $ 293,886 |
Condensed Consolidating Finan41
Condensed Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Thousands | Jun. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 |
Assets: | ||||
Cash | $ 6,995 | $ 7,683 | $ 10,353 | $ 7,159 |
Receivables, net | 141,475 | 140,037 | ||
Inventories, net | 94,402 | 53,909 | ||
Prepaid expenses and other assets | 9,424 | 7,513 | ||
Rental equipment, net | 902,378 | 893,816 | ||
Property and equipment, net | 104,632 | 105,492 | ||
Deferred financing costs, net | 1,558 | 1,964 | ||
Goodwill | 31,197 | 31,197 | ||
Total assets | 1,292,061 | 1,241,611 | ||
Liabilities and Stockholders’ Equity: | ||||
Amounts due on senior secured credit facility | 164,852 | 162,642 | ||
Accounts payable | 81,053 | 39,432 | ||
Manufacturer flooring plans payable | 25,824 | 30,780 | ||
Accrued expenses payable and other liabilities | 60,720 | 56,833 | ||
Dividends payable | 89 | 67 | ||
Senior unsecured notes | 627,914 | 627,711 | 627,306 | |
Capital leases payable | 1,597 | 1,704 | ||
Deferred income taxes | 186,922 | 177,835 | ||
Deferred compensation payable | 1,869 | 1,842 | ||
Total liabilities | 1,150,840 | 1,098,846 | ||
Stockholders’ equity | 141,221 | 142,765 | ||
Total liabilities and stockholders’ equity | 1,292,061 | 1,241,611 | ||
H & E Equipment Services [Member] | ||||
Assets: | ||||
Cash | 6,995 | 7,683 | $ 10,353 | $ 7,159 |
Receivables, net | 113,323 | 112,758 | ||
Inventories, net | 78,733 | 49,509 | ||
Prepaid expenses and other assets | 9,203 | 7,343 | ||
Rental equipment, net | 746,342 | 743,759 | ||
Property and equipment, net | 93,476 | 93,866 | ||
Deferred financing costs, net | 1,558 | 1,964 | ||
Investment in guarantor subsidiaries | 231,555 | 220,209 | ||
Goodwill | 1,671 | 1,671 | ||
Total assets | 1,282,856 | 1,238,762 | ||
Liabilities and Stockholders’ Equity: | ||||
Amounts due on senior secured credit facility | 164,852 | 162,642 | ||
Accounts payable | 73,912 | 36,188 | ||
Manufacturer flooring plans payable | 24,233 | 30,899 | ||
Accrued expenses payable and other liabilities | 61,801 | 58,774 | ||
Dividends payable | 132 | 106 | ||
Senior unsecured notes | 627,914 | 627,711 | ||
Deferred income taxes | 186,922 | 177,835 | ||
Deferred compensation payable | 1,869 | 1,842 | ||
Total liabilities | 1,141,635 | 1,095,997 | ||
Stockholders’ equity | 141,221 | 142,765 | ||
Total liabilities and stockholders’ equity | 1,282,856 | 1,238,762 | ||
Guarantor Subsidiaries [Member] | ||||
Assets: | ||||
Receivables, net | 28,152 | 27,279 | ||
Inventories, net | 15,669 | 4,400 | ||
Prepaid expenses and other assets | 221 | 170 | ||
Rental equipment, net | 156,036 | 150,057 | ||
Property and equipment, net | 11,156 | 11,626 | ||
Goodwill | 29,526 | 29,526 | ||
Total assets | 240,760 | 223,058 | ||
Liabilities and Stockholders’ Equity: | ||||
Accounts payable | 7,141 | 3,244 | ||
Manufacturer flooring plans payable | 1,591 | (119) | ||
Accrued expenses payable and other liabilities | 1,081 | 1,941 | ||
Dividends payable | (43) | (39) | ||
Capital leases payable | 1,597 | 1,704 | ||
Total liabilities | 9,205 | 2,849 | ||
Stockholders’ equity | 231,555 | 220,209 | ||
Total liabilities and stockholders’ equity | 240,760 | 223,058 | ||
Elimination [Member] | ||||
Assets: | ||||
Investment in guarantor subsidiaries | (231,555) | (220,209) | ||
Total assets | (231,555) | (220,209) | ||
Liabilities and Stockholders’ Equity: | ||||
Stockholders’ equity | (231,555) | (220,209) | ||
Total liabilities and stockholders’ equity | $ (231,555) | $ (220,209) |
Condensed Consolidating Finan42
Condensed Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Revenues: | ||||
Revenues | $ 249,363 | $ 242,095 | $ 476,191 | $ 489,105 |
Cost of revenues: | ||||
Cost of revenues | 162,023 | 160,387 | 311,179 | 326,253 |
Gross profit (loss): | ||||
Gross profit | 87,340 | 81,708 | 165,012 | 162,852 |
Selling, general and administrative expenses | 59,807 | 57,049 | 117,125 | 116,423 |
Gain on sales of property and equipment, net | 1,135 | 712 | 2,106 | 1,374 |
Income from operations | 28,668 | 25,371 | 49,993 | 47,803 |
Other income (expense): | ||||
Interest expense | (13,373) | (13,353) | (26,605) | (26,760) |
Other, net | 373 | 689 | 810 | 1,119 |
Total other expense, net | (13,000) | (12,664) | (25,795) | (25,641) |
Income before provision for income taxes | 15,668 | 12,707 | 24,198 | 22,162 |
Income tax expense | 5,790 | 5,204 | 8,930 | 9,085 |
Net income | 9,878 | 7,503 | 15,268 | 13,077 |
Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 41,838 | 39,675 | 82,741 | 79,172 |
Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 20,162 | 18,021 | 38,536 | 34,784 |
Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 232,058 | 225,911 | 442,923 | 457,772 |
Gross profit (loss): | ||||
Gross profit | 86,916 | 81,606 | 165,050 | 162,657 |
Other [Member] | ||||
Revenues: | ||||
Revenues | 17,305 | 16,184 | 33,268 | 31,333 |
Cost of revenues: | ||||
Cost of revenues | 16,881 | 16,082 | 33,306 | 31,138 |
Gross profit (loss): | ||||
Gross profit | 424 | 102 | (38) | 195 |
Elimination [Member] | ||||
Gross profit (loss): | ||||
Equity in earnings of guarantor subsidiaries | (3,769) | (2,761) | (4,981) | (4,496) |
Income from operations | (3,769) | (2,761) | (4,981) | (4,496) |
Other income (expense): | ||||
Income before provision for income taxes | (3,769) | (2,761) | (4,981) | (4,496) |
Net income | (3,769) | (2,761) | (4,981) | (4,496) |
Equipment Rentals [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 118,370 | 108,650 | 225,687 | 211,488 |
Gross profit (loss): | ||||
Gross profit | 56,370 | 50,954 | 104,410 | 97,532 |
Equipment Rentals [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 41,838 | 39,675 | 82,741 | 79,172 |
Equipment Rentals [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 20,162 | 18,021 | 38,536 | 34,784 |
New Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 45,669 | 49,893 | 79,943 | 107,072 |
Cost of revenues: | ||||
Cost of revenues | 40,450 | 44,531 | 70,831 | 95,005 |
Gross profit (loss): | ||||
Gross profit | 5,219 | 5,362 | 9,112 | 12,067 |
Used Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 24,106 | 23,769 | 52,969 | 51,343 |
Cost of revenues: | ||||
Cost of revenues | 17,002 | 16,875 | 36,863 | 35,387 |
Gross profit (loss): | ||||
Gross profit | 7,104 | 6,894 | 16,106 | 15,956 |
Parts Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 27,969 | 26,654 | 53,300 | 54,623 |
Cost of revenues: | ||||
Cost of revenues | 20,358 | 19,213 | 38,571 | 39,476 |
Gross profit (loss): | ||||
Gross profit | 7,611 | 7,441 | 14,729 | 15,147 |
Services Revenues [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 15,944 | 16,945 | 31,024 | 33,246 |
Cost of revenues: | ||||
Cost of revenues | 5,332 | 5,990 | 10,331 | 11,291 |
Gross profit (loss): | ||||
Gross profit | 10,612 | 10,955 | 20,693 | 21,955 |
H & E Equipment Services [Member] | ||||
Revenues: | ||||
Revenues | 206,304 | 201,105 | 394,991 | 406,204 |
Cost of revenues: | ||||
Cost of revenues | 135,411 | 134,346 | 260,053 | 271,719 |
Gross profit (loss): | ||||
Gross profit | 70,893 | 66,759 | 134,938 | 134,485 |
Selling, general and administrative expenses | 52,766 | 46,989 | 103,001 | 96,591 |
Equity in earnings of guarantor subsidiaries | 3,769 | 2,761 | 4,981 | 4,496 |
Gain on sales of property and equipment, net | 905 | 636 | 1,629 | 1,166 |
Income from operations | 22,801 | 23,167 | 38,547 | 43,556 |
Other income (expense): | ||||
Interest expense | (7,407) | (11,084) | (14,970) | (22,386) |
Other, net | 274 | 624 | 621 | 992 |
Total other expense, net | (7,133) | (10,460) | (14,349) | (21,394) |
Income before provision for income taxes | 15,668 | 12,707 | 24,198 | 22,162 |
Income tax expense | 5,790 | 5,204 | 8,930 | 9,085 |
Net income | 9,878 | 7,503 | 15,268 | 13,077 |
H & E Equipment Services [Member] | Other [Member] | ||||
Revenues: | ||||
Revenues | 14,078 | 13,121 | 27,240 | 25,547 |
Cost of revenues: | ||||
Cost of revenues | 13,752 | 13,106 | 27,040 | 25,353 |
Gross profit (loss): | ||||
Gross profit | 326 | 15 | 200 | 194 |
H & E Equipment Services [Member] | Equipment Rentals [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 96,709 | 88,592 | 184,992 | 174,617 |
Gross profit (loss): | ||||
Gross profit | 45,427 | 40,801 | 84,726 | 79,665 |
H & E Equipment Services [Member] | Equipment Rentals [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 34,542 | 32,831 | 68,290 | 65,944 |
H & E Equipment Services [Member] | Equipment Rentals [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 16,740 | 14,960 | 31,976 | 29,008 |
H & E Equipment Services [Member] | New Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 38,819 | 41,808 | 68,494 | 87,340 |
Cost of revenues: | ||||
Cost of revenues | 34,315 | 37,273 | 60,685 | 77,388 |
Gross profit (loss): | ||||
Gross profit | 4,504 | 4,535 | 7,809 | 9,952 |
H & E Equipment Services [Member] | Used Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 19,333 | 19,821 | 42,474 | 42,737 |
Cost of revenues: | ||||
Cost of revenues | 14,056 | 14,161 | 30,155 | 29,803 |
Gross profit (loss): | ||||
Gross profit | 5,277 | 5,660 | 12,319 | 12,934 |
H & E Equipment Services [Member] | Parts Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 23,970 | 23,295 | 45,701 | 47,516 |
Cost of revenues: | ||||
Cost of revenues | 17,527 | 16,833 | 33,217 | 34,439 |
Gross profit (loss): | ||||
Gross profit | 6,443 | 6,462 | 12,484 | 13,077 |
H & E Equipment Services [Member] | Services Revenues [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 13,395 | 14,468 | 26,090 | 28,447 |
Cost of revenues: | ||||
Cost of revenues | 4,479 | 5,182 | 8,690 | 9,784 |
Gross profit (loss): | ||||
Gross profit | 8,916 | 9,286 | 17,400 | 18,663 |
Guarantor Subsidiaries [Member] | ||||
Revenues: | ||||
Revenues | 43,059 | 40,990 | 81,200 | 82,901 |
Cost of revenues: | ||||
Cost of revenues | 26,612 | 26,041 | 51,126 | 54,534 |
Gross profit (loss): | ||||
Gross profit | 16,447 | 14,949 | 30,074 | 28,367 |
Selling, general and administrative expenses | 7,041 | 10,060 | 14,124 | 19,832 |
Gain on sales of property and equipment, net | 230 | 76 | 477 | 208 |
Income from operations | 9,636 | 4,965 | 16,427 | 8,743 |
Other income (expense): | ||||
Interest expense | (5,966) | (2,269) | (11,635) | (4,374) |
Other, net | 99 | 65 | 189 | 127 |
Total other expense, net | (5,867) | (2,204) | (11,446) | (4,247) |
Income before provision for income taxes | 3,769 | 2,761 | 4,981 | 4,496 |
Net income | 3,769 | 2,761 | 4,981 | 4,496 |
Guarantor Subsidiaries [Member] | Other [Member] | ||||
Revenues: | ||||
Revenues | 3,227 | 3,063 | 6,028 | 5,786 |
Cost of revenues: | ||||
Cost of revenues | 3,129 | 2,976 | 6,266 | 5,785 |
Gross profit (loss): | ||||
Gross profit | 98 | 87 | (238) | 1 |
Guarantor Subsidiaries [Member] | Equipment Rentals [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 21,661 | 20,058 | 40,695 | 36,871 |
Gross profit (loss): | ||||
Gross profit | 10,943 | 10,153 | 19,684 | 17,867 |
Guarantor Subsidiaries [Member] | Equipment Rentals [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 7,296 | 6,844 | 14,451 | 13,228 |
Guarantor Subsidiaries [Member] | Equipment Rentals [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||
Cost of revenues: | ||||
Cost of revenues | 3,422 | 3,061 | 6,560 | 5,776 |
Guarantor Subsidiaries [Member] | New Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 6,850 | 8,085 | 11,449 | 19,732 |
Cost of revenues: | ||||
Cost of revenues | 6,135 | 7,258 | 10,146 | 17,617 |
Gross profit (loss): | ||||
Gross profit | 715 | 827 | 1,303 | 2,115 |
Guarantor Subsidiaries [Member] | Used Equipment Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 4,773 | 3,948 | 10,495 | 8,606 |
Cost of revenues: | ||||
Cost of revenues | 2,946 | 2,714 | 6,708 | 5,584 |
Gross profit (loss): | ||||
Gross profit | 1,827 | 1,234 | 3,787 | 3,022 |
Guarantor Subsidiaries [Member] | Parts Sales [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 3,999 | 3,359 | 7,599 | 7,107 |
Cost of revenues: | ||||
Cost of revenues | 2,831 | 2,380 | 5,354 | 5,037 |
Gross profit (loss): | ||||
Gross profit | 1,168 | 979 | 2,245 | 2,070 |
Guarantor Subsidiaries [Member] | Services Revenues [Member] | Operating Segments [Member] | ||||
Revenues: | ||||
Revenues | 2,549 | 2,477 | 4,934 | 4,799 |
Cost of revenues: | ||||
Cost of revenues | 853 | 808 | 1,641 | 1,507 |
Gross profit (loss): | ||||
Gross profit | $ 1,696 | $ 1,669 | $ 3,293 | $ 3,292 |
Condensed Consolidating Finan43
Condensed Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Cash flows from operating activities: | |||||
Net income | $ 9,878 | $ 7,503 | $ 15,268 | $ 13,077 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization on property and equipment | 12,115 | 13,464 | |||
Depreciation of rental equipment | 82,741 | 79,172 | |||
Amortization of deferred financing costs | 526 | 526 | |||
Accretion of note discount, net of premium amortization | 84 | 83 | |||
Provision for losses on accounts receivable | 1,858 | 2,008 | |||
Provision for inventory obsolescence | 71 | 14 | |||
Change in deferred income taxes | 9,968 | 9,182 | |||
Stock-based compensation expense | 1,894 | 1,667 | |||
Gain from sales of property and equipment, net | (1,135) | (712) | (2,106) | (1,374) | |
Gain from sales of rental equipment, net | (15,349) | (15,467) | |||
Changes in operating assets and liabilities: | |||||
Receivables | (3,274) | 7,110 | |||
Inventories | (49,585) | (52,467) | |||
Prepaid expenses and other assets | (1,911) | 489 | |||
Accounts payable | 41,621 | 22,322 | |||
Manufacturer flooring plans payable | (4,956) | (16,466) | |||
Accrued expenses payable and other liabilities | 3,715 | 4,600 | |||
Deferred compensation payable | 27 | (363) | |||
Net cash provided by operating activities | 92,707 | 67,577 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (12,137) | (11,465) | |||
Purchases of rental equipment | (112,946) | (69,144) | |||
Proceeds from sales of property and equipment | 3,137 | 1,683 | |||
Proceeds from sales of rental equipment | 46,013 | 44,501 | |||
Net cash used in investing activities | (75,933) | (34,425) | |||
Cash flows from financing activities: | |||||
Borrowings on senior secured credit facility | 484,252 | 482,513 | |||
Payments on senior secured credit facility | (482,042) | (492,866) | |||
Dividends paid | (19,565) | (19,505) | |||
Payments on capital lease obligations | (107) | (100) | |||
Net cash used in financing activities | (17,462) | (29,958) | |||
Net increase (decrease) in cash | (688) | 3,194 | |||
Cash, beginning of period | 7,683 | 7,159 | $ 7,159 | ||
Cash, end of period | 6,995 | 10,353 | 6,995 | 10,353 | 7,683 |
H & E Equipment Services [Member] | |||||
Cash flows from operating activities: | |||||
Net income | 9,878 | 7,503 | 15,268 | 13,077 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization on property and equipment | 10,535 | 11,952 | |||
Depreciation of rental equipment | 68,290 | 65,944 | |||
Amortization of deferred financing costs | 526 | 526 | |||
Accretion of note discount, net of premium amortization | 84 | 83 | |||
Provision for losses on accounts receivable | 1,484 | 1,979 | |||
Provision for inventory obsolescence | 71 | 14 | |||
Change in deferred income taxes | 9,968 | 9,182 | |||
Stock-based compensation expense | 1,894 | 1,667 | |||
Gain from sales of property and equipment, net | (905) | (636) | (1,629) | (1,166) | |
Gain from sales of rental equipment, net | (11,595) | (12,481) | |||
Equity in earnings of guarantor subsidiaries | (3,769) | (2,761) | (4,981) | (4,496) | |
Changes in operating assets and liabilities: | |||||
Receivables | (2,027) | 10,639 | |||
Inventories | (36,815) | (38,755) | |||
Prepaid expenses and other assets | (1,860) | 547 | |||
Accounts payable | 37,724 | 14,511 | |||
Manufacturer flooring plans payable | (6,666) | (16,466) | |||
Accrued expenses payable and other liabilities | 2,855 | 3,855 | |||
Deferred compensation payable | 27 | (363) | |||
Net cash provided by operating activities | 83,153 | 60,249 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (10,915) | (9,903) | |||
Purchases of rental equipment | (87,518) | (44,643) | |||
Proceeds from sales of property and equipment | 2,548 | 1,417 | |||
Proceeds from sales of rental equipment | 35,760 | 36,342 | |||
Investment in subsidiaries | (6,365) | (10,414) | |||
Net cash used in investing activities | (66,490) | (27,201) | |||
Cash flows from financing activities: | |||||
Borrowings on senior secured credit facility | 484,252 | 482,513 | |||
Payments on senior secured credit facility | (482,042) | (492,866) | |||
Dividends paid | (19,561) | (19,501) | |||
Net cash used in financing activities | (17,351) | (29,854) | |||
Net increase (decrease) in cash | (688) | 3,194 | |||
Cash, beginning of period | 7,683 | 7,159 | 7,159 | ||
Cash, end of period | 6,995 | 10,353 | 6,995 | 10,353 | $ 7,683 |
Guarantor Subsidiaries [Member] | |||||
Cash flows from operating activities: | |||||
Net income | 3,769 | 2,761 | 4,981 | 4,496 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Depreciation and amortization on property and equipment | 1,580 | 1,512 | |||
Depreciation of rental equipment | 14,451 | 13,228 | |||
Provision for losses on accounts receivable | 374 | 29 | |||
Gain from sales of property and equipment, net | (230) | (76) | (477) | (208) | |
Gain from sales of rental equipment, net | (3,754) | (2,986) | |||
Changes in operating assets and liabilities: | |||||
Receivables | (1,247) | (3,529) | |||
Inventories | (12,770) | (13,712) | |||
Prepaid expenses and other assets | (51) | (58) | |||
Accounts payable | 3,897 | 7,811 | |||
Manufacturer flooring plans payable | 1,710 | ||||
Accrued expenses payable and other liabilities | 860 | 745 | |||
Net cash provided by operating activities | 9,554 | 7,328 | |||
Cash flows from investing activities: | |||||
Purchases of property and equipment | (1,222) | (1,562) | |||
Purchases of rental equipment | (25,428) | (24,501) | |||
Proceeds from sales of property and equipment | 589 | 266 | |||
Proceeds from sales of rental equipment | 10,253 | 8,159 | |||
Net cash used in investing activities | (15,808) | (17,638) | |||
Cash flows from financing activities: | |||||
Dividends paid | (4) | (4) | |||
Payments on capital lease obligations | (107) | (100) | |||
Capital contributions | 6,365 | 10,414 | |||
Net cash used in financing activities | 6,254 | 10,310 | |||
Elimination [Member] | |||||
Cash flows from operating activities: | |||||
Net income | (3,769) | (2,761) | (4,981) | (4,496) | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Equity in earnings of guarantor subsidiaries | $ 3,769 | $ 2,761 | 4,981 | 4,496 | |
Cash flows from investing activities: | |||||
Investment in subsidiaries | 6,365 | 10,414 | |||
Net cash used in investing activities | 6,365 | 10,414 | |||
Cash flows from financing activities: | |||||
Capital contributions | (6,365) | (10,414) | |||
Net cash used in financing activities | $ (6,365) | $ (10,414) |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - Subsequent Event [Member] | Jul. 14, 2017USD ($)$ / shares |
ABL Facility [Member] | Wells Fargo [Member] | |
Subsequent Event [Line Items] | |
Percentage committed by lender to provide credit facility | 100.00% |
Bridge Facility [Member] | Wells Fargo [Member] | |
Subsequent Event [Line Items] | |
Available borrowings under our senior secured credit facility | $ 825,000,000 |
Percentage committed by lender to provide credit facility | 100.00% |
Neff Corporation [Member] | |
Subsequent Event [Line Items] | |
Total enterprise value | $ 1,200,000,000 |
Net debt (debt less cash and cash equivalents) included in total enterprise value | $ 690,000,000 |
Maximum per share merger consideration payable to Neff stockholders subject to certain downward adjustment | $ / shares | $ 0.44 |
Description of merger transaction expected closing date | The transaction is expected to close in the late third quarter or early fourth quarter of 2017, and is subject to customary closing conditions including Hart-Scott-Rodino Act clearance, as well as a “go-shop” period in favor of Neff Corporation, which period will expire at 11:59 p.m. on August 20, 2017. |
Neff Corporation [Member] | Maximum [Member] | Proposed Equity Offering [Member] | |
Subsequent Event [Line Items] | |
Issuance and sale of common stock, value authorized | $ 250,000,000 |
Neff Corporation [Member] | Proposed Notes Offering [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Issuance and sale of senior unsecured notes, value authorized | 575,000,000 |
Issuance and sale of senior unsecured notes, value authorized if equity offering not consummated in full or at all | $ 825,000,000 |
Neff Corporation [Member] | 7% Senior Notes [Member] | |
Subsequent Event [Line Items] | |
Senior unsecured notes, interest rate | 7.00% |
Senior unsecured notes, maturity year | 2,022 |
Aggregate principal amount | $ 630,000,000 |
Neff Corporation [Member] | ABL Facility [Member] | |
Subsequent Event [Line Items] | |
Available borrowings under our senior secured credit facility | $ 1,250,000,000 |
Neff Corporation [Member] | Class A Common Stock [Member] | |
Subsequent Event [Line Items] | |
Cash consideration per share | $ / shares | $ 21.07 |