Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 15, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
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 Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 35,658,355 | ||
Entity Public Float | $ 620,309,311 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets | ||
Cash | $ 165,878 | $ 7,683 |
Receivables, net of allowance for doubtful accounts of $3,774 and $3,769, respectively | 176,081 | 140,037 |
Inventories, net of reserves for obsolescence of $947 and $900, respectively | 75,004 | 53,909 |
Prepaid expenses and other assets | 9,172 | 7,513 |
Rental equipment, net of accumulated depreciation of $495,940 and $437,522, respectively | 904,824 | 893,816 |
Property and equipment, net of accumulated depreciation and amortization of $131,500 and $118,812, respectively | 101,789 | 105,492 |
Deferred financing costs, net of accumulated amortization of $12,946 and $12,160, respectively | 3,772 | 1,964 |
Goodwill | 31,197 | 31,197 |
Total assets | 1,467,717 | 1,241,611 |
Liabilities: | ||
Amounts due on senior secured credit facility | 162,642 | |
Accounts payable | 89,781 | 39,432 |
Manufacturer flooring plans payable | 22,002 | 30,780 |
Accrued expenses payable and other liabilities | 65,095 | 56,833 |
Dividends payable | 150 | 67 |
Senior unsecured notes, net of unaccreted discount of $3,644 and $952 and deferred financing costs of $2,267 and $1,339, respectively | 944,088 | 627,711 |
Capital leases payable | 1,486 | 1,704 |
Deferred income taxes | 126,419 | 177,835 |
Deferred compensation payable | 1,903 | 1,842 |
Total liabilities | 1,250,924 | 1,098,846 |
Commitments and Contingencies (Note 13) | ||
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; 39,623,773 and 39,496,759 shares issued at December 31, 2017 and 2016, respectively, and 35,646,585 and 35,554,491 shares outstanding at December 31, 2017 and 2016, respectively | 395 | 394 |
Additional paid-in capital | 227,070 | 223,544 |
Treasury stock at cost, 3,977,188 and 3,942,268 shares of common stock held at December 31, 2017 and 2016, respectively | (61,749) | (60,966) |
Retained earnings (accumulated deficit) | 51,077 | (20,207) |
Total stockholders’ equity | 216,793 | 142,765 |
Total liabilities and stockholders’ equity | $ 1,467,717 | $ 1,241,611 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables | $ 3,774 | $ 3,769 |
Reserves for obsolescence inventories | 947 | 900 |
Accumulated depreciation, rental equipment | 495,940 | 437,522 |
Accumulated depreciation and amortization, property and equipment | 131,500 | 118,812 |
Accumulated amortization, deferred financing costs | 12,946 | 12,160 |
Unaccreted discount, net | 3,644 | 952 |
Deferred financing costs | $ 2,267 | $ 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 | 39,623,773 | 39,496,759 |
Common stock, shares outstanding | 35,646,585 | 35,554,491 |
Treasury stock, shares | 3,977,188 | 3,942,268 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||||||||||||
Revenues | $ 294,666 | $ 259,162 | $ 249,363 | $ 226,828 | $ 244,346 | $ 244,686 | $ 242,095 | $ 247,010 | $ 1,030,019 | $ 978,137 | $ 1,039,831 | |
Cost of revenues: | ||||||||||||
Cost of revenues | 670,111 | 642,526 | 694,099 | |||||||||
Gross profit | 359,908 | 335,611 | 345,732 | |||||||||
Selling, general and administrative expenses | 232,784 | 228,129 | 220,226 | |||||||||
Merger breakup fee proceeds, net of merger costs | 5,800 | 6,500 | 5,782 | |||||||||
Gain from sales of property and equipment, net | 5,009 | 3,285 | 2,737 | |||||||||
Income from operations | 40,268 | 47,654 | 28,668 | 21,325 | 29,874 | 33,090 | 25,371 | 22,432 | 137,915 | 110,767 | 128,243 | |
Other income (expense): | ||||||||||||
Interest expense | (54,958) | (53,604) | (54,030) | |||||||||
Loss on early extinguishment of debt | $ (25,400) | (25,363) | ||||||||||
Other, net | 1,750 | 1,867 | 1,463 | |||||||||
Total other expense, net | (78,571) | (51,737) | (52,567) | |||||||||
Income before provision (benefit) for income taxes | 27,569 | 7,577 | 15,668 | 8,530 | 16,861 | 20,007 | 12,707 | 9,455 | 59,344 | 59,030 | 75,676 | |
Provision (benefit) for income taxes | (50,314) | 21,858 | 31,371 | |||||||||
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | $ 109,658 | $ 37,172 | $ 44,305 | |
Net income per common share: | ||||||||||||
Basic | $ 2.41 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.09 | $ 1.05 | $ 1.26 | |
Diluted | $ 2.40 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.07 | $ 1.05 | $ 1.25 | |
Weighted average common shares outstanding: | ||||||||||||
Basic | 35,516 | 35,393 | 35,272 | |||||||||
Diluted | 35,699 | 35,480 | 35,343 | |||||||||
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.05 | |||||||||
Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | $ 169,455 | $ 162,415 | $ 162,089 | |||||||||
Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,706 | 71,694 | 71,950 | |||||||||
Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 959,903 | 912,645 | 974,621 | |||||||||
Cost of revenues: | ||||||||||||
Gross profit | 359,084 | 335,437 | 344,486 | |||||||||
Operating Segments [Member] | Equipment Rentals [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 479,016 | 445,227 | 443,024 | |||||||||
Cost of revenues: | ||||||||||||
Gross profit | 231,855 | 211,118 | 208,985 | |||||||||
Operating Segments [Member] | Equipment Rentals [Member] | Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 169,455 | 162,415 | 162,089 | |||||||||
Operating Segments [Member] | Equipment Rentals [Member] | Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,706 | 71,694 | 71,950 | |||||||||
Operating Segments [Member] | New Equipment Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 203,301 | 196,688 | 238,172 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 180,702 | 175,556 | 212,235 | |||||||||
Gross profit | 22,599 | 21,132 | 25,937 | |||||||||
Operating Segments [Member] | Used Equipment Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 107,329 | 96,910 | 118,338 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 74,132 | 66,738 | 81,338 | |||||||||
Gross profit | 33,197 | 30,172 | 37,000 | |||||||||
Operating Segments [Member] | Parts Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 107,384 | 109,147 | 111,133 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,713 | 78,966 | 80,830 | |||||||||
Gross profit | 29,671 | 30,181 | 30,303 | |||||||||
Operating Segments [Member] | Services Revenues [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 62,873 | 64,673 | 63,954 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 21,111 | 21,839 | 21,693 | |||||||||
Gross profit | 41,762 | 42,834 | 42,261 | |||||||||
Other [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 70,116 | 65,492 | 65,210 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 69,292 | 65,318 | 63,964 | |||||||||
Gross profit | $ 824 | $ 174 | $ 1,246 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Treasury Stock [Member] | Retained Earnings (Accumulated Deficit) [Member] |
Beginning balances at Dec. 31, 2014 | $ 133,367 | $ 390 | $ 218,349 | $ (59,935) | $ (25,437) |
Beginning balances, shares at Dec. 31, 2014 | 39,100,021 | ||||
Stock-based compensation | 2,655 | 2,655 | |||
Cash dividends declared on common stock ($1.05 per share in 2015, $1.10 per share in 2016 and $1.10 per share in 2017) | (37,146) | (37,146) | |||
Tax deficiency associated with stock-based awards | (125) | (125) | |||
Issuance of non-vested restricted common stock | 2 | $ 2 | |||
Issuance of non-vested restricted common stock, shares | 233,550 | ||||
Repurchases of 25,484, 37,565 and 34,920 shares of restricted common stock in 31 December 2015, 2016 and 2017 respectively | (470) | (470) | |||
Net income | 44,305 | 44,305 | |||
Ending Balance at Dec. 31, 2015 | 142,588 | $ 392 | 220,879 | (60,405) | (18,278) |
Balance, Shares at Dec. 31, 2015 | 39,333,571 | ||||
Stock-based compensation | 3,037 | 3,037 | |||
Cash dividends declared on common stock ($1.05 per share in 2015, $1.10 per share in 2016 and $1.10 per share in 2017) | (39,101) | (39,101) | |||
Tax deficiency associated with stock-based awards | (372) | (372) | |||
Issuance of non-vested restricted common stock | 2 | $ 2 | |||
Issuance of non-vested restricted common stock, shares | 163,188 | ||||
Repurchases of 25,484, 37,565 and 34,920 shares of restricted common stock in 31 December 2015, 2016 and 2017 respectively | (561) | (561) | |||
Net income | 37,172 | 37,172 | |||
Ending Balance at Dec. 31, 2016 | $ 142,765 | $ 394 | 223,544 | (60,966) | (20,207) |
Balance, Shares at Dec. 31, 2016 | 39,496,759 | 39,496,759 | |||
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 | 3,526 | 3,526 | |||
Cash dividends declared on common stock ($1.05 per share in 2015, $1.10 per share in 2016 and $1.10 per share in 2017) | (39,255) | (39,255) | |||
Issuance of non-vested restricted common stock | 1 | $ 1 | |||
Issuance of non-vested restricted common stock, shares | 127,014 | ||||
Repurchases of 25,484, 37,565 and 34,920 shares of restricted common stock in 31 December 2015, 2016 and 2017 respectively | (783) | (783) | |||
Net income | 109,658 | 109,658 | |||
Ending Balance at Dec. 31, 2017 | $ 216,793 | $ 395 | $ 227,070 | $ (61,749) | $ 51,077 |
Balance, Shares at Dec. 31, 2017 | 39,623,773 | 39,623,773 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.05 |
Retained Earnings (Accumulated Deficit) [Member] | |||
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.05 |
Treasury Stock [Member] | |||
Repurchase of restricted common stock, shares | 34,920 | 37,565 | 25,484 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | |||
Net income | $ 109,658 | $ 37,172 | $ 44,305 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 23,790 | 27,282 | 24,368 |
Depreciation of rental equipment | 169,455 | 162,415 | 162,089 |
Amortization of deferred financing costs | 1,046 | 1,052 | 1,036 |
Accretion of note discount, net of premium amortization | 274 | 168 | 168 |
Provision for losses on accounts receivable | 3,932 | 3,137 | 3,441 |
Provision for inventory obsolescence | 161 | 127 | 295 |
Change in deferred income taxes | (50,535) | 21,578 | 30,651 |
Stock-based compensation expense | 3,526 | 3,037 | 2,655 |
Loss on early extinguishment of debt | 25,363 | ||
Gain from sales of property and equipment, net | (5,009) | (3,285) | (2,737) |
Gain from sales of rental equipment, net | (31,882) | (29,003) | (35,134) |
Changes in operating assets and liabilities: | |||
Receivables | (40,012) | 4,154 | 13,566 |
Inventories | (31,771) | 4,267 | (14,517) |
Prepaid expenses and other assets | (1,659) | 2,541 | (908) |
Accounts payable | 50,349 | (27,345) | 13,436 |
Manufacturer flooring plans payable | (8,778) | (31,653) | (31,167) |
Accrued expenses payable and other liabilities | 8,230 | 1,667 | (4,995) |
Deferred compensation payable | 61 | (332) | 68 |
Net cash provided by operating activities | 226,199 | 176,979 | 206,620 |
Cash flows from investing activities: | |||
Purchases of property and equipment | (22,515) | (22,895) | (26,797) |
Purchases of rental equipment | (234,209) | (179,709) | (178,772) |
Proceeds from sales of property and equipment | 7,506 | 3,805 | 4,289 |
Proceeds from sales of rental equipment | 96,143 | 84,389 | 99,521 |
Net cash used in investing activities | (153,075) | (114,410) | (101,759) |
Cash flows from financing activities: | |||
Purchases of treasury stock | (783) | (561) | (470) |
Borrowings on senior secured credit facility | 1,193,544 | 966,146 | 982,961 |
Payments on senior secured credit facility | (1,356,186) | (988,361) | (1,058,023) |
Principal payments on senior unsecured notes due 2022 | (630,000) | ||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336) | ||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500 | ||
Payments of deferred financing costs | (17,278) | (725) | |
Dividend paid | (39,172) | (39,066) | (37,114) |
Payments of capital lease obligations | (218) | (203) | (192) |
Net cash provided by (used in) financing activities | 85,071 | (62,045) | (113,563) |
Net increase (decrease) in cash | 158,195 | 524 | (8,702) |
Cash, beginning of year | 7,683 | 7,159 | 15,861 |
Cash, end of year | 165,878 | 7,683 | 7,159 |
Non-cash asset purchases: | |||
Assets transferred from new and used inventory to rental fleet | 10,515 | 38,515 | 51,391 |
Purchases of property and equipment included in accrued expenses payable and other liabilities | (23) | (386) | |
Cash paid during the year for: | |||
Interest | 49,546 | 52,494 | 52,803 |
Income taxes paid (refunds received), net | $ 478 | $ 177 | $ (1,591) |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Organization and Nature of Operations | (1) Organization and Nature of Operations Organization Prior to our initial public offering in February 2006, our business was conducted through H&E LLC. In connection with our initial public offering, we converted H&E LLC into H&E Equipment Services, Inc. In order to have an operating Delaware corporation as the issuer for our initial public offering, H&E Equipment Services, Inc. was formed as a Delaware corporation and wholly-owned subsidiary of H&E Holdings L.L.C. (“H&E Holdings”), and immediately prior to the closing of our initial public offering, on February 3, 2006, H&E LLC and H&E Holdings merged with and into H&E Equipment Services, Inc., which survived the reincorporation merger as the operating company. Effective February 3, 2006, H&E LLC and H&E Holdings no longer existed under operation of law pursuant to the reincorporation merger. 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 services 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | (2) Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation Our 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.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. 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 consolidated balance sheets are presented on an unclassified basis. 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. Revenue Recognition As noted in the discussion below (see “Recent Accounting Pronouncements” below), we will adopt as of January 1, 2018, updated FASB revenue recognition guidance (Topic 606). Topic 606 is an update to Topic 605, which was the revenue recognition standard in effect for all periods during each of the three years ended December 31, 2017, 2016 and 2015. For each of these years, we recognized revenue in accordance with two different accounting standards: (1) Topic 605 and (2) Topic 840, which is the lease standard. Pursuant to Topic 605, revenue generally is realized or realizable and earned when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectibility is reasonably assured. Revenue from the sale of new and used equipment and parts is recognized at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled, risk of ownership has been transferred and collectibility is reasonably assured. Services revenue is recognized at the time the services are rendered. Other revenues consist primarily of billings to customers for rental equipment delivery and damage waiver charges and are generally recognized at the time the service has been provided. We account for equipment that we rent as operating leases. Pursuant to Topic 840, we recognize revenue from equipment rentals in the period earned, regardless of the timing of the billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenue is earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across financial reporting periods, we record unbilled rental revenue and deferred rental revenue at the end of reporting periods so rental revenue earned is appropriately stated in the periods presented. Inventories New and used equipment inventories are stated at the lower of cost or net realizable value, with cost determined by specific-identification. Inventories of parts and supplies are stated at the lower of the average cost or market. See also the “Recent Accounting Pronouncements” on page 48 for new accounting guidance related to measurement of inventories. Long-lived Assets and Goodwill Rental Equipment The rental equipment we purchase is stated at cost and is depreciated over the estimated useful lives of the equipment using the straight-line method. Estimated useful lives vary based upon type of equipment. Generally, we depreciate cranes and aerial work platforms over a ten year estimated useful life, earthmoving equipment over a five year estimated useful life with a 25% salvage value, and industrial lift trucks over a seven year estimated useful life. Attachments and other smaller type equipment are depreciated generally over a three year estimated useful life. We periodically evaluate the appropriateness of remaining depreciable lives and any salvage value assigned to rental equipment. Ordinary repair and maintenance costs and property taxes are charged to operations as incurred. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. When rental equipment is sold or disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gains or losses are included in income. We receive individual offers for fleet on a continual basis, at which time we perform an analysis on whether or not to accept the offer. The rental equipment is not transferred to inventory under the held for sale model as the equipment is used to generate revenues until the equipment is sold. Property and Equipment Property and equipment are recorded at cost and are depreciated over the assets’ estimated useful lives using the straight-line method. Ordinary repair and maintenance costs are charged to operations as incurred. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in income. We capitalize interest on qualified construction projects. Costs associated with internally developed software are accounted for in accordance with FASB ASC 350-40, Internal-Use Software We periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the remaining term of the lease, whichever is shorter. Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Transportation equipment 5 years Buildings 39 years Office equipment 5 years Computer equipment 3 years Machinery and equipment 7 years In accordance with ASC 360, Property, Plant and Equipment Goodwill We have made acquisitions in the past that included the recognition of goodwill, which was determined based upon previous accounting principles. Pursuant to ASC 350, Intangibles-Goodwill and Other We evaluate goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. We have identified two components within our Rental operating segment and have determined that each of our other operating segments (New, Used, Parts and Service) represent a reporting unit, resulting in six total reporting units. ASC 350 allows entities to first use a qualitative approach to test goodwill for impairment. ASC 350 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not (a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, the currently prescribed two-step goodwill test must be performed. Otherwise, the two-step goodwill impairment test is not required. Considerable judgment is required by management in using the qualitative approach under ASC 350 to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. We performed a qualitative assessment as of October 1, 2017 and there was no goodwill impairment. ASC 350 suggests that a qualitative assessment may become less relevant over time. In other words, the longer it has been since the last quantitative assessment, the more difficult it could be for a company to conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. Our last quantitative assessment of goodwill impairment was as of October 1, 2016. Step 1 of that test determined that the fair values of the goodwill reporting units exceeded their respective carrying values and, therefore, Step 2 of the goodwill test was not required, as there was no goodwill impairment at October 1, 2016. Closed Branch Facility Charges We continuously monitor and identify branch facilities with revenues and operating margins that consistently fall below Company performance standards. Once identified, we continue to monitor these branches to determine if operating performance can be improved or if the performance is attributable to economic factors unique to the particular market with unfavorable long-term prospects. If necessary, branches with unfavorable long-term prospects are closed and the rental fleet and new and used equipment inventories are deployed to more profitable branches within our geographic footprint where demand is higher. We closed one branch during each of the years ended December 31, 2017 and 2016 in markets where long-term prospects did not support continued operations. No branches were closed during 2015. Under ASC 420, Exit or Disposal Cost Obligations Deferred Financing Costs and Initial Purchasers’ Discounts Deferred financing costs include legal, accounting and other direct costs incurred in connection with the issuance and amendments thereto, of the Company’s debt. These costs are amortized over the terms of the related debt using the straight-line method which approximates amortization using the effective interest method. Initial purchasers’ discount and bond premium is the differential between the price paid to an issuer for the new issue and the prices (below and above, respectively) at which the securities are initially offered to the investing public. The amortization expense of deferred financing costs and bond premium and accretion of initial purchasers’ discounts are included in interest expense as an overall cost of the related financings. Such costs are presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. Reserves for Claims We are exposed to various claims relating to our business, including those for which we provide self-insurance. Claims for which we self-insure include: (1) workers compensation claims; (2) general liability claims by third parties for injury or property damage caused by our equipment or personnel; (3) automobile liability claims; and (4) employee health insurance claims. These types of claims may take a substantial amount of time to resolve and, accordingly, the ultimate liability associated with a particular claim, including claims incurred but not reported as of a period-end reporting date, may not be known for an extended period of time. Our methodology for developing self-insurance reserves is based on management estimates and independent third party actuarial estimates. Our estimation process considers, among other matters, the cost of known claims over time, cost inflation and incurred but not reported claims. These estimates may change based on, among other things, changes in our claim history or receipt of additional information relevant to assessing the claims. Further, these estimates may prove to be inaccurate due to factors such as adverse judicial determinations or other claim settlements at higher than estimated amounts. Accordingly, we may be required to increase or decrease our reserve levels. At December 31, 2017, our claims reserves related to workers compensation, general liability and automobile liability, which are included in “Accrued expenses and other liabilities” in our consolidated balance sheets, totaled $4.6 million and our health insurance reserves totaled $1.2 million. At December 31, 2016, our claims reserves related to workers compensation, general liability and automobile liability totaled $4.9 million and our health insurance reserves totaled $1.0 million. Sales Taxes We impose and collect significant amounts of sales taxes concurrent with our revenue-producing transactions with customers and remit those taxes to the various governmental agencies as prescribed by the taxing jurisdictions in which we operate. We present such taxes in our consolidated statements of income on a net basis. Advertising Advertising costs are expensed as incurred and totaled $0.5 million, $1.0 million and $1.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. Shipping and Handling Fees and Costs Shipping and handling fees billed to customers are recorded as revenues while the related shipping and handling costs are included in other cost of revenues. See discussion of shipping and handling revenues in Recent Accounting Pronouncements below with respect to the new revenue recognition guidance effective January 1, 2018. Income Taxes The Company files a consolidated federal income tax return with its wholly-owned subsidiaries. The Company is a C-Corporation under the provisions of the Internal Revenue Code. We utilize the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with ASC 740. ASC 740 takes into account the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that rate. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Included in the Act is a reduction in the corporate statutory tax rate from 35% to 21%, effective for us on January 1, 2018. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. In the case of US federal income taxes, the enactment date is the date the bill becomes law (i.e., upon presidential signature). As of December 31, 2017, we have not completed our accounting for all the tax effects of the enactment of the Act. However, with respect to this legislation, we recorded a one-time decrease in income tax expense of $66.9 million in the fourth quarter of 2017, due to a re-measurement of our deferred tax assets and liabilities resulting from the decrease in the corporate federal income tax rate from 35% to 21%. In accordance with ASC 740, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax provisions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions in net other income (expense). Our deferred tax calculation requires management to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. 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 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 December 31, 2017 and 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. December 31, 2017 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 22,002 $ 18,737 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 3) 944,088 619,019 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,486 1,114 Letter of credit (Level 3) — 116 December 31, 2016 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.25% (Level 3) $ 30,780 $ 26,780 Senior unsecured notes due 2022 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 At December 31, 2017, the fair value of our senior unsecured notes due 2025 was based on the present value of the notes based on our incremental borrowing rate as these notes were not available (registered) on a bond trading market as of December 31, 2017. At December 31, 2016, the fair value of our senior unsecured notes due 2022 were based on quoted bond trading market prices of those notes. During 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. Concentrations of Credit and Supplier Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable. Credit risk can be negatively impacted by adverse changes in the economy or by disruptions in the credit markets. However, we believe that credit risk with respect to trade accounts receivable is somewhat mitigated by our large number of geographically diverse customers and our credit evaluation procedures. Although generally no collateral is required, when feasible, mechanics’ liens are filed and personal guarantees are signed to protect the Company’s interests. We maintain reserves for potential losses. We record trade accounts receivables at sales value and establish specific reserves for certain customer accounts identified as known collection problems due to insolvency, disputes or other collection issues. The amounts of the specific reserves estimated by management are based on the following assumptions and variables: the customer’s financial position, age of the customer’s receivables and changes in payment schedules. In addition to the specific reserves, management establishes a non-specific allowance for doubtful accounts by applying specific percentages to the different receivable aging categories (excluding the specifically reserved accounts). The percentage applied against the aging categories increases as the accounts become further past due. The allowance for doubtful accounts is charged with the write-off of uncollectible customer accounts. We purchase a significant amount of equipment from the same manufacturers with whom we have distribution agreements. During the year ended December 31, 2017, we purchased approximately 42% from three manufacturers (Grove/Manitowoc, Komatsu, and Genie Industries (Terex)) providing our rental and sales equipment. We believe that while there are alternative sources of supply for the equipment we purchase in each of the principal product categories, termination of one or more of our relationships with any of our major suppliers of equipment could have a material adverse effect on our business, financial condition or results of operation if we were unable to obtain adequate or timely rental and sales equipment. Income per Share Income per common share for the year ended December 31, 2017, 2016 and 2015 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 during the periods ended December 31, 2017, 2016 and 2015 were only 0.8%, 0.8% and 0.8% of total outstanding shares, respectively, and, consequently, were 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 as presented for the years ended December 31, 2017, 2016 and 2015. The following table sets forth the computation of basic and diluted net income per common share for the years ended December 31, (amounts in thousands, except per share amounts): 2017 2016 2015 Basic net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Net income per common share — basic $ 3.09 $ 1.05 $ 1.26 Diluted net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Effect of dilutive securities: Effect of dilutive stock options — — 14 Effect of dilutive non-vested stock 183 87 57 Weighted average number of common shares outstanding — diluted 35,699 35,480 35,343 Net income per common share — diluted $ 3.07 $ 1.05 $ 1.25 Common shares excluded from the denominator as anti-dilutive: Stock options — 4 14 Non-vested stock — 3 8 Stock-Based Compensation We adopted our 2006 Stock-Based Incentive Compensation Plan (as amended and restated from time to time, the “Prior Stock Plan”) and over the ten years prior to June 2016, we had been granting awards under our Prior Stock Plan. The Prior Stock Plan expired pursuant to its terms in June 2016, and the Company is no longer able to grant equity awards under the Prior Stock Plan. At our annual meeting of stockholders in May 2016, our stockholders approved our 2016 Stock-Based Incentive Compensation Plan (the “2016 Plan” and collectively with the Prior Stock Plan, the “Stock Plans”). To the extent that awards granted under the Prior Stock Plan are forfeited or otherwise terminate for any reason whatsoever without an actual distribution or issuance of shares, the plan limit will be increased by such number of shares. The Stock Plans are administered by the Compensation Committee of our Board of Directors, which selects persons eligible to receive awards and determines the number of shares and/or options subject to each award, the terms, conditions, performance measures, if any, and other provisions of the award. Under the Stock Incentive Plan, we may offer deferred shares or restricted shares of our common stock and grant options, including both incentive stock options and nonqualified stock options, to purchase shares of our common stock. Shares available for future stock-based payment awards under our Stock Incentive Plan were 1,844,301 shares of common stock as of December 31, 2017. We account for our stock-based compensation plans using the fair value recognition provisions of Accounting Standards Codification 718, Stock Compensation Non-vested Stock From time to time, we issue shares of non-vested stock typically with vesting terms of three years. The following table summarizes our non-vested stock activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2016 322,355 $ 19.90 Granted 227,532 $ 17.39 Vested (136,765 ) $ 18.88 Forfeited (12,321 ) $ 18.83 Non-vested stock at December 31, 2016 400,801 $ 18.86 Granted 190,134 $ 22.94 Vested (131,807 ) $ 21.85 Forfeited (13,164 ) $ 19.50 Non-vested stock at December 31, 2017 445,964 $ 19.70 As of December 31, 2017, we had unrecognized compensation expense of approximately $4.8 million related to non-vested stock award payments that we expect to be recognized over a weighted average period of 2.0 years. Stock Options No stock options were granted during 2017, 2016 or 2015. At December 31, 2017, we had no unrecognized compensation expense related to prior stock option awards. No stock compensation expense was recognized in 2017, 2016 or 2015 related to stock options. The following table represents stock option activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Exercise Price(1) Weighted Average Contractual Life In Years Outstanding options at January 1, 2016 51,000 $ 17.80 1.5 Granted — — Exercised — — Canceled, forfeited or expired (46,500 ) 17.65 Outstanding options at December 31, 2016 4,500 $ 19.27 0.5 Granted — — Exercised — — Canceled, forfeited or expired (4,500 ) $ 19.27 Outstanding options at December 31, 2017 — Options exercisable at December 31, 2017 — Purchases of Company Common Stock Purchases of our common stock are accounted for as treasury stock in the accompanying consolidated balance sheets using the cost method. Repurchased stock is included in authorized shares, but is not included in shares outstanding. Segment Reporting We have determined in accordance with ASC 280, Segment Reporting 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 (Topic 606), which will supersede Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, and other legacy industry-specific revenue recognition guidance. In August 2015, the FASB deferred the effective date of this new standard by one year. The FASB later issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations, in March 2016, ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing, in April 2016, ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, in May 2016, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, in December 2016, all of which further clarified aspects of Topic 606. Topic 606 clarifies the principles for revenue recognition. Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In doing so, entities will need to use more judgment and make more estimates than under current guidance. These judgments and estimates may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Topic 606 also requires an entity to disclose sufficient qualitative and quantitative information surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 permits the use of either a retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying Topic 606 at the date of adoption. Topic 606 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We will adopt Topic 606 as of January 1, 2018 using a full retrospective application to each prior period presented. Below is our evaluation of the impact from the adoption of Topic 606. Revenues from equipment rentals accounted for 46.5% of our total revenues for the year ended December 31, 2017. Based on our analysis of Topic 606, we have determined that the accounting for equipment rental revenues is outside the scope of Topic 606. Therefore, upon our adoption of the new revenue recognition guidance on January 1, 2018, we will recognize our revenues pursuant to two different accounting standards. Revenues from equipment rentals will continue to be accounted for pursuant to current lease accounting guidance until our adoption of the new lease accounting standard in 2019 (as further discussed below in the Topic 842 pending lease accounting guidance), while revenues from new and used equipment sales, parts and services revenues and other revenues will be subject to Topic 606 upon adoption and are further described below. Sales of new and used equipment accounted for 30.2% of our total revenues for the year ended December 31, 2017. Parts and services revenues comprised 16.5% of our total revenues for the year ended December 31, 2017. The primary impact to these revenue streams from the adoption of Topic 606 will relate to the accounting treatment of shipping and handling revenues, some of which shipping and handling revenues we currently include in other revenues in our consolidated statements of income. Other revenues comprised approximately 6.8% of our total revenues for the year ended December 31, 2017. Pursuant to Topic 606, shipping and handling activities that are performed before the customer obtains control of the good are not a separate promised service to the customer. Rather, shipping and handling activities fulfill an entity’s promise to transfer the good. While the timing of our revenue recognition related to our shipping and handling activities, such as hauling revenues related to new and used equipment sales, maintenance and repair services, as well as parts freight, will not change upon adoption of the new guidance, we believe that Topic 606 requires revenues related to shipping and handling activities to be treated as fulfillment activities when the customer obtains control of the good a |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | (3) Acquisitions On July 14, 2017, we and Neff Corporation (“Neff”) announced that we had entered into a definitive merger agreement under which we would acquire Neff by way of merger. The merger agreement was subject to customary closing conditions, and also included a “go-shop” period expiring on August 20, 2017, during which Neff could solicit alternative proposals to acquire Neff. On August 13, 2017, Neff notified us that it had determined that an acquisition proposal Neff had received constituted a “Superior Proposal” (as defined in the merger agreement) to acquire Neff and that Neff intended to terminate the merger agreement with us to enter into an agreement for such acquisition proposal, subject to our right to match the proposal under the merger agreement. On August 16, 2017, we announced that we had notified Neff that we did not intend to submit a revised proposal for the acquisition of Neff, , and on August 17, 2017, Neff terminated the merger agreement with us and immediately entered into a definitive agreement with United Rentals, Inc. (“URI”) under which United Rentals would acquire Neff. Pursuant to the terms of the merger agreement between us and Neff, Neff paid us a termination fee to us of approximately $13.2 million concurrently with Neff’s termination of the merger agreement. We received the $13.2 million breakup fee on August 16, 2017. Total estimated transaction costs related to the proposed merger with Neff, including related financing costs, were approximately $6.7 million. Also included in this line item are estimated merger fees associated with the CEC acquisition of approximately $0.8 million. The net breakup fee proceeds of $5.8 million are presented in our statements of income for the year ended December 31, 2017 in the line item, “Merger breakup fee proceeds, net of merger costs”. As of February 22, 2018, a preliminary allocation of the fair value of the existing purchase price of CEC had yet to be completed. Accordingly, disclosure of the allocation of the purchase price to the CEC balance line items and the pro forma presentation reflecting the impact of the acquisition will be disclosed in subsequent filings. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Receivables | (4) Receivables Receivables consisted of the following at December 31, (amounts in thousands): 2017 2016 Trade receivables $ 172,522 $ 137,470 Unbilled rental revenue 6,291 5,384 Income tax receivables 997 949 Other 45 3 179,855 143,806 Less allowance for doubtful accounts (3,774 ) (3,769 ) Total receivables, net $ 176,081 $ 140,037 We charge off customer account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | (5) Inventories Inventories consisted of the following at December 31, (amounts in thousands): 2017 2016 New equipment $ 55,704 $ 34,451 Used equipment 2,421 3,461 Parts, supplies and other 16,879 15,997 Total inventories, net $ 75,004 $ 53,909 The above amounts are presented net of reserves for inventory obsolescence at December 31, 2017 and 2016 totaling approximately $0.9 million and $0.9 million, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | (6) Property and Equipment Net property and equipment consisted of the following at December 31, (amounts in thousands): 2017 2016 Land $ 7,165 $ 7,054 Transportation equipment 93,550 89,168 Building and leasehold improvements 55,523 53,967 Office and computer equipment 53,256 51,971 Machinery and equipment 15,983 15,179 Property under capital leases 3,217 3,217 Construction in progress 4,595 3,748 233,289 224,304 Less accumulated depreciation and amortization (131,500 ) (118,812 ) Total net property and equipment $ 101,789 $ 105,492 Total depreciation and amortization on property and equipment was $23.8 million, $27.3 million and $27.3 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Manufacturer Flooring Plans Pay
Manufacturer Flooring Plans Payable | 12 Months Ended |
Dec. 31, 2017 | |
Text Block [Abstract] | |
Manufacturer Flooring Plans Payable | (7) Manufacturer Flooring Plans Payable Manufacturer flooring plans payable are financing arrangements for inventory and rental equipment. The interest cost incurred on the manufacturer flooring plans ranged from 0% to the prime rate (4.50% at December 31, 2017) plus an applicable margin at December 31, 2017. Certain manufacturer flooring plans provide for a one to twelve-month reduced interest rate term or a deferred payment period. We recognize interest expense based on the effective interest method. We make payments in accordance with the original terms of the financing agreements. However, we routinely sell equipment that is financed under manufacturer flooring plans prior to the original maturity date of the financing agreement. The related manufacturer flooring plan payable is then paid at the time the equipment being financed is sold. The manufacturer flooring plans payable are secured by the equipment being financed. Maturities (based on original financing terms) of the manufacturer flooring plans payable as of December 31, 2017 for each of the next three years ending December 31 are as follows (amounts in thousands): 2018 $ 11,345 2019 10,657 2020 — Thereafter — Total $ 22,002 |
Accrued Expenses Payable and Ot
Accrued Expenses Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Accrued Expenses Payable and Other Liabilities | (8) Accrued Expenses Payable and Other Liabilities Accrued expenses payable and other liabilities consisted of the following at December 31, (amounts in thousands): 2017 2016 Payroll and related liabilities $ 20,429 $ 17,842 Sales, use and property taxes 9,635 9,925 Accrued interest 19,134 15,112 Accrued insurance 4,211 4,227 Deferred revenue 6,631 5,703 Other 5,055 4,024 Total accrued expenses payable and other liabilities $ 65,095 $ 56,833 |
Senior Unsecured Notes
Senior Unsecured Notes | 12 Months Ended |
Dec. 31, 2017 | |
Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Senior Secured Credit Facility | (9) Senior Unsecured Notes On August 24, 2017, we completed an offering of $750 million aggregate principal amount of 5.6250% senior notes due 2025 (the “New Notes”) and the settlement of a cash tender offer (the “Tender Offer”) with respect to our 7% senior notes due 2022 (the “Old Notes”). Net proceeds, after deducting $10.3 million of estimated offering expenses, from the sale of the New Notes totaled approximately $739.7 million. We used a portion of the net proceeds from the sale of the New Notes to repurchase $329.7 million of aggregate principal amount of the Old Notes in early settlement of the Tender Offer, which the Company launched on August 17, 2017. Holders who tendered their Old Notes prior to the early tender deadline received $1,038.90 per $1,000 principal amount of Old Notes tendered, plus accrued and unpaid interest up to, but not including, the payment date of August 24, 2017. Effective as of August 24, 2017, we (i) provided notice of the redemption of all remaining Old Notes that were not validly tendered in the Tender Offer at the expiration time and (ii) satisfied and discharged the indenture governing the Old Notes in accordance with its terms. On September 25, 2017, we redeemed the remaining $300.3 million principal amount outstanding of the Old Notes at a redemption price equal to 103.50% of the principal amount thereof, plus accrued and unpaid interest up to, but not including, the date of redemption. The New Notes were issued at par and require semiannual interest payments on March 1st and September 1st of each year, commencing on March 1, 2018. No principal payments are due until maturity (September 1, 2025). The New Notes are redeemable, in whole or in part, at any time on or after September 1, 2020 at specified redemption prices plus accrued and unpaid interest to the date of redemption. We may redeem up to 40% of the aggregate principal amount of the New Notes before September 1, 2020 with the net cash proceeds from certain equity offerings. We may also redeem the New Notes prior to September 1, 2020 at a specified “make-whole” redemption price plus accrued and unpaid interest to the date of redemption. The New Notes rank equally in right of payment to all of our existing and future senior indebtedness and rank senior to any of our subordinated indebtedness. The New Notes are unconditionally guaranteed on a senior unsecured basis by all of our current and future significant domestic restricted subsidiaries. In addition, the New Notes are effectively subordinated to all of our and the guarantors’ existing and future secured indebtedness, including the Credit Facility, to the extent of the assets securing such indebtedness, and are structurally subordinated to all of the liabilities and preferred stock of any of our subsidiaries that do not guarantee the New Notes. If we experience a change of control, we will be required to offer to purchase the New Notes at a repurchase price equal to 101% of the principal amount, plus accrued and unpaid interest to the date of repurchase. The indenture governing the New Notes contains certain covenants that, among other things, limit our ability and the ability of our restricted subsidiaries to: (i) incur additional indebtedness, assume a guarantee or issue preferred stock; (ii) pay dividends or make other equity distributions or payments to or affecting our subsidiaries; (iii) purchase or redeem our capital stock; (iv) make certain investments; (v) create liens; (vi) sell or dispose of assets or engage in mergers or consolidations; (vii) engage in certain transactions with subsidiaries or affiliates; (viii) enter into sale-leaseback transactions; and (ix) engage in certain business activities. Each of the covenants is subject to exceptions and qualifications. As of December 31, 2017, we were in compliance with these covenants. On November 22, 2017, we closed on an offering of $200 million aggregate principal amount of 5.625% senior notes due 2025 (the “Add-on Notes”) in an unregistered offering through a private placement. The Add-on Notes were priced at 104.25% of the principal amount. Net proceeds from the offering of the Add-on Notes, including accrued interest from August 24, 2017 totaled approximately $209.2 million. The net proceeds of the offering, was used to repay indebtedness outstanding under the Company’s existing senior secured credit facility (the “Credit Facility”) and for the payment of fees and expenses related to the offering. The remainder of the net proceeds will be used for general corporate purposes and to fund potential acquisitions in connection with our ongoing strategy of acquiring rental companies to complement our existing business and footprint. The Add-on Notes were issued as additional notes under an indenture dated as of August 24, 2017, pursuant to which we previously issued the New Notes as described above. The Add-on Notes have identical terms to, rank equally with and form a part of a single class of securities with the New Notes. Pursuant to a registration rights agreement entered into between us, the guarantors of the New Notes and the initial purchasers of the New Notes, we agreed to make an offer to exchange (the “Exchange Offer”) the New Notes and guarantees for registered, publicly tradable notes and guarantees that have terms identical in all material respects to the New Notes (except that the exchange notes will not contain any transfer restrictions) within a certain period of time following the completion of the offering. On January 17, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the New and Add-on Notes and guarantees for registered, publicly tradable notes and guarantees that have terms identical in all material respects to the New and Add-on Notes (except that the exchange notes do not contain any transfer restrictions). This exchange offer closed on is expected to launch and close in the first quarter of 2018. The following table reconciles our Senior Unsecured Notes to our Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2015 $ 627,306 Accretion of discount on Old Notes through December 31, 2016 1,055 Amortization of note premium on Old Notes through December 31, 2016 (887 ) Amortization of deferred financing costs on Old Notes through December 31, 2016 237 Balance at December 31, 2016 $ 627,711 Accretion of discount on Old Notes through August 24, 2017 683 Amortization of note premium on Old Notes through August 24, 2017 (574 ) Amortization of deferred financing costs on Old Notes through August 24, 2017 153 Aggregate principal amount paid on Old Notes (630,000 ) Writeoff of unaccreted discount on Old Notes 5,294 Writeoff of unamortized premium on Old Notes (4,452 ) Writeoff of deferred financing costs on Old Notes 1,185 Aggregate principal amount issued on New Notes 950,000 Notes discount and deferred transaction costs on New Notes (14,684 ) Note premium on New Notes 8,500 Accretion of discount on New Notes from August 24, 2017 through December 31, 2017 542 Amortization of note premium on New Notes from August 24, 2017 through December 31, 2017 (375 ) Amortization of deferred financing costs on New Notes from August 24, 2017 through December 31, 2017 105 Balance at December 31, 2017 $ 944,088 |
Senior Secured Credit Facility
Senior Secured Credit Facility | 12 Months Ended |
Dec. 31, 2017 | |
Secured Debt [Member] | |
Senior Secured Credit Facility | (10) Senior Secured Credit Facility We and our subsidiaries are parties to a $750.0 million Credit Facility with Wells Fargo Capital Finance, LLC (as successor to General Electric Capital Corporation) as administrative agent, and the lenders named therein. On December 22, 2017, we amended, extended and restated the Credit Facility by entering into the Fifth 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, Wells Fargo Capital Finance, LLC, as administrative agent, the other credit parties named therein, the lenders named therein, and the joint lead arrangers, joint book runners, co-syndication agents and documentation agent named therein. The Amended and Restated Credit Agreement, among other things, (i) extends the maturity date of the credit facility from May 21, 2019 to December 22, 2022, (ii) increases the commitments under the senior secured asset based revolver provided for therein from $602.5 million to $750 million, (iii) increases the uncommitted incremental revolving capacity from $150 million to $250 million, (iv) provides that the unused line fee margin will be either 0.375% or 0.25%, depending on the Average Revolver Usage (as defined in the Amended and Restated Credit Agreement) of the borrowers, (v) lowers the interest rate (a) in the case of base rate revolving loans, to the base rate plus an applicable margin of 0.50% to 1.00% depending on the Average Availability (as defined in the Amended and Restated Credit Agreement) and (b) in the case of LIBOR revolving loans, to LIBOR (as defined in the Amended and Restated Credit Agreement) plus an applicable margin of 1.50% to 2.00%, depending on the Average Availability, (vi) lowers the margin applicable to the letter of credit fee to between 1.50% and 2.00%, depending on the Average Availability, and (vii) permits, subject to certain conditions, an unlimited amount of Permitted Acquisitions, Restricted Payments and prepayments of Indebtedness (in each case, as defined in the Amended and Restated Credit Agreement). The Amended and Restated Credit Agreement continues to provide for, among other things, a $30 million letter of credit sub-facility, and a guaranty by certain of the Company’s subsidiaries of the obligations under the credit facility. In addition, the credit facility remains secured by substantially all of the assets of the Company and certain of its subsidiaries. At December 31, 2017, we had no borrowings outstanding under the Credit Facility and could borrow up to $742.3 million and remain in compliance with the debt covenants under the Company’s credit facility. At February 15, 2018, we had $742.3 million of available borrowings under our Credit Facility, net of a $7.7 million outstanding letter of credit. |
Capital Lease Obligations
Capital Lease Obligations | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Capital Lease Obligations | ( 11) Capital Lease Obligations As of December 31, 2017, we had two capital lease obligations, expiring in 2022 and 2029, respectively. Future minimum capital lease payments, in the aggregate, existing at December 31, 2017 for each of the next five years ending December 31 and thereafter are as follows (amounts in thousands): 2018 $ 333 2019 333 2020 333 2021 333 2022 123 Thereafter 507 Total minimum lease payments 1,962 Less: amount representing interest (476 ) Present value of minimum lease payments $ 1,486 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | (12) Income Taxes On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Among other changes, the Act reduced the corporate federal income tax rate from 35% to 21%. As a result of the rate change, we recorded a one-time decrease in income tax expense of $66.9 million from the re-measurement of our deferred tax assets and liabilities which is reflected in the tables below. Our income tax provision (benefit) for the years ended December 31, 2017, 2016 and 2015, consists of the following (amounts in thousands): Current Deferred Total Year ended December 31, 2017: U.S. Federal $ — $ (54,241 ) $ (54,241 ) State 220 3,707 3,927 $ 220 $ (50,534 ) $ (50,314 ) Year ended December 31, 2016: U.S. Federal $ — $ 21,516 $ 21,516 State 280 62 342 $ 280 $ 21,578 $ 21,858 Year ended December 31, 2015: U.S. Federal $ 85 $ 25,206 $ 25,291 State 634 5,446 6,080 $ 719 $ 30,652 $ 31,371 Significant components of our deferred income tax assets and liabilities as of December 31 are as follows (amounts in thousands): 2017 2016 Deferred tax assets: Accounts receivable $ 929 $ 1,415 Inventories 239 347 Net operating losses 18,165 25,117 AMT and tax credits 3,565 3,522 Sec 263A costs 544 599 Accrued liabilities 2,767 4,238 Deferred compensation 1,132 1,001 Accrued interest 365 533 Stock-based compensation 181 283 Goodwill and intangible assets — 58 Other assets 531 414 28,418 37,527 Valuation allowance (732 ) (207 ) 27,686 37,320 Deferred tax liabilities: Property and equipment (152,235 ) (213,537 ) Investments (1,066 ) (1,618 ) Goodwill and intangible assets (804 ) — (154,105 ) (215,155 ) Net deferred tax liabilities $ (126,419 ) $ (177,835 ) The reconciliation between income taxes computed using the statutory federal income tax rate of 35% to the actual income tax expense (benefit) is below for the years ended December 31 (amounts in thousands): 2017 2016 2015 Computed tax at statutory rates $ 20,770 $ 20,660 $ 26,487 Permanent items - other 911 904 953 Permanent items - excess of tax deductible goodwill (2,130 ) — — State income tax, net of federal tax effect 2,563 2,115 3,892 Change in valuation allowance 397 207 — Change in uncertain tax positions (5,960 ) 66 39 Other - change in deferred state rate — (2,094 ) 0 Impact of the Act federal rate change (66,865 ) — — $ (50,314 ) $ 21,858 $ 31,371 At December 31, 2017, we had available federal net operating loss carry forwards of approximately $83.4 million, which expire in varying amounts from 2030 through 2036. We also had federal alternative minimum tax credit carry forwards at December 31, 2017 of approximately $3.0 million which do not expire and $0.3 million general business credit carry forwards that expire in varying amounts from 2026 and 2036, and state income tax credits of $0.2 million that expire in varying amounts beginning in 2018. The federal and state net operating loss carryforwards in the income tax returns filed included unrecognized tax benefits taken in prior years. These net operating losses for which a deferred tax asset is recognized for financial statement purposes in accordance with ASC 740 are presented net of these unrecognized tax benefits. Management has concluded that it is more likely than not that the federal deferred tax assets are fully realizable through future reversals of existing taxable temporary differences and future taxable income. Therefore, a valuation allowance is not required to reduce those deferred tax assets as of December 31, 2017. However, for the year ended December 31, 2017, we increased our valuation allowance by $0.4 million for certain state net operating losses expiring soon that may not be utilized. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): 2017 2016 Gross unrecognized tax benefits at January 1 $ 6,119 $ 6,035 Increases in tax positions taken in prior years 22 26 Decreases in tax positions taken in prior years (22 ) — Increases in tax positions taken in current year — 105 Decreases for tax positions taken in current year — — Settlements with taxing authorities — — Lapse in statute of limitations (6,013 ) (47 ) Gross unrecognized tax benefits at December 31 $ 106 $ 6,119 The reserves established for the gross amount of unrecognized tax benefits as of December 31, 2017 includes approximately $0.1 million of net unrecognized tax benefits that, if recognized, would affect the effective income tax rate. The statute of limitations lapsed during 2017 for approximately $6.0 million of unrecognized tax benefits. We recognized a reduction of $5.9 million in income tax expense as a result. Consistent with our historical financial reporting, to the extent we incur interest income, interest expense, or penalties related to unrecognized income tax benefits, they are recorded in “Other net income or expense.” The amount of interest and penalties included in the table above are not material. We do not expect a material change in unrecognized tax benefits related to federal and state exposures will occur within the next twelve months. Our U.S. federal tax returns for 2014 and subsequent years remain subject to examination by tax authorities. We are also subject to examination in various state jurisdictions for 2013 and subsequent years. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) Commitments and Contingencies Operating Leases As of December 31, 2017, we lease certain real estate related to our branch facilities as well as certain office equipment under non-cancelable operating lease agreements expiring at various dates through 2033. Our real estate leases provide for varying terms, including customary renewal options and base rental escalation clauses, for which the related rent expense is accounted for on a straight-line basis during the terms of the respective leases. Additionally, certain real estate leases may require us to pay maintenance, insurance, taxes and other expenses in addition to the stated rental payments. Rent expense on property leases and equipment leases under non-cancelable operating lease agreements for the years ended December 31, 2017, 2016 and 2015 amounted to approximately $20.1 million, $18.3 million and $15.5 million, respectively. Future minimum operating lease payments existing at December 31, 2017 for each of the next five years ending December 31 and thereafter are as follows (amounts in thousands): 2018 $ 20,171 2019 20,517 2020 19,379 2021 18,107 2022 16,555 Thereafter 85,978 $ 180,707 Legal Matters We are also involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, after consultation with legal counsel, the ultimate disposition of these various matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. Letters of Credit The Company had outstanding letters of credit issued under its Credit Facility totaling $7.7 million as of December 31, 2017 and 2016, respectively. The 2017 letters of credit expired in January 2018 and were renewed under one combined letter of credit for $7.7 million for a one-year period expiring in January 2019. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plan | (14) Employee Benefit Plan We offer substantially all of our employees’ participation in a qualified 401(k)/profit-sharing plan in which we match employee contributions up to predetermined limits for qualified employees as defined by the plan. For the years ended December 31, 2017, 2016 and 2015, we contributed to the plan, net of employee forfeitures, $2.2 million, $2.0 million and $2.2 million, respectively. |
Deferred Compensation Plans
Deferred Compensation Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Deferred Compensation Plans | (15) Deferred Compensation Plans In 2001, we assumed, in a business combination, nonqualified employee deferred compensation plans under which certain employees had previously elected to defer a portion of their annual compensation. Upon assumption of the plans, the plans were amended to not allow further participant compensation deferrals. Compensation previously deferred under the plans is payable upon the termination, disability or death of the participants. At December 31, 2017, we have obligations remaining under one deferred compensation plan. All other plans have terminated pursuant to the provisions of each respective plan. The remaining plan accumulates interest each year at a bank’s prime rate in effect at the beginning of January of each year. This rate remains constant throughout the year. The effective rate for the 2017 calendar plan year was 3.75%. The aggregate deferred compensation payable at December 31, 2017 and December 31, 2016 was approximately $1.9 million and $1.8 million, respectively. Included in these amounts at December 31, 2017 and 2016 was accrued interest of $1.4 million and $1.4 million, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (16) Related Party Transactions John M. Engquist, our Chief Executive Officer, has a 50.0% ownership interest in T&J Partnership from which we leased our Shreveport, Louisiana facility. Mr. Engquist’s mother beneficially owns 50% of the entity. In 2015, we paid T&J Partnership a total of approximately $0.2 million in lease payments. T&J Partnership sold this property in November 2015 to an unrelated party, from whom we now lease the property. Mr. Engquist has a 30.0% ownership interest in Perkins-McKenzie Insurance Agency, Inc. (“Perkins-McKenzie”), an insurance brokerage firm. Mr. Engquist’s mother and sister have a 12.0% and 6.0% interest, respectively, in Perkins-McKenzie. Perkins-McKenzie brokers a substantial portion of our commercial liability insurance. As the broker, Perkins-McKenzie receives from our insurance provider as a commission a portion of the premiums we pay to the insurance provider. Commissions paid to Perkins-McKenzie on our behalf as insurance broker totaled approximately $0.8 million, $0.9 million and $0.9 million for the years ended December 31, 2017, 2016 and 2015, respectively. We purchase products and services from, and sell products and services to, B-C Equipment Sales, Inc., in which Mr. Engquist has a 50% ownership interest. In each of the years ended December 31, 2017, 2016 and 2015, our purchases totaled $0.4 million, $0.4 million and $0.2 million, respectively, and our sales to B-C Equipment Sales, Inc. totaled approximately $0.1 million, $0.1 million and $0.1 million, respectively. |
Summarized Quarterly Financial
Summarized Quarterly Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summarized Quarterly Financial Data (Unaudited) | (17) Summarized Quarterly Financial Data (Unaudited) The following is a summary of our unaudited quarterly financial results of operations for the years ended December 31, 2017 and 2016 (amounts in thousands, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2017: Total revenues $ 226,828 $ 249,363 $ 259,162 $ 294,666 Income from operations (1) 21,325 28,668 47,654 40,268 Income (loss) before provision (benefit) for income taxes (2) 8,530 15,668 7,577 27,569 Net income (loss) (3) 5,390 9,878 8,462 85,928 Basic net income (loss) per common share (4) 0.15 0.28 0.24 2.41 Diluted net income (loss) per common share (4) 0.15 0.28 0.24 2.40 First Quarter Second Quarter Third Quarter Fourth Quarter 2016: Total revenues $ 247,010 $ 242,095 $ 244,686 $ 244,346 Income from operations 22,432 25,371 33,090 29,874 Income before provision for income taxes 9,455 12,707 20,007 16,861 Net income 5,574 7,503 11,665 12,430 Basic net income per common share (4) 0.16 0.21 0.33 0.35 Diluted net income per common share (4) 0.16 0.21 0.33 0.35 (1) (2) (3) (4) |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | (18) Segment Information We have identified five reportable segments: equipment rentals, new equipment sales, used equipment sales, parts sales and service 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 our reportable segments. We do not compile discrete financial information by our segments other than the information presented below. The following table presents information about our reportable segments (amounts in thousands): Years Ended December 31, 2017 2016 2015 Segment Revenues: Equipment rentals $ 479,016 $ 445,227 $ 443,024 New equipment sales 203,301 196,688 238,172 Used equipment sales 107,329 96,910 118,338 Parts sales 107,384 109,147 111,133 Services revenues 62,873 64,673 63,954 Total segmented revenues 959,903 912,645 974,621 Non-Segmented revenues 70,116 65,492 65,210 Total revenues $ 1,030,019 $ 978,137 $ 1,039,831 Segment Gross Profit: Equipment rentals $ 231,855 $ 211,118 $ 208,985 New equipment sales 22,599 21,132 25,937 Used equipment sales 33,197 30,172 37,000 Parts sales 29,671 30,181 30,303 Services revenues 41,762 42,834 42,261 Total gross profit from segmented revenues 359,084 335,437 344,486 Non-Segmented gross profit 824 174 1,246 Total gross profit $ 359,908 $ 335,611 $ 345,732 December 31, 2017 2016 Segment identified assets: Equipment sales $ 58,125 $ 37,912 Equipment rentals 904,824 893,816 Parts and service 16,879 15,997 Total segment identified assets 979,828 947,725 Non-Segmented identified assets 487,889 293,886 Total assets $ 1,467,717 $ 1,241,611 The Company operates primarily in the United States and our sales to international customers for the years ended December 31, 2017, 2016 and 2015 were 0.4%, 0.4% and 0.6%, respectively, of total revenues for the periods presented. No one customer accounted for more than 10% of our revenues on an overall or segmented basis for any of the periods presented. |
Consolidating Financial Informa
Consolidating Financial Information of Guarantor Subsidiaries | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Consolidating Financial Information of Guarantor Subsidiaries | (19) 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. and Yellow Iron Merger Co. are not included within the consolidating financial statements because H&E Finance Corp. and Yellow Iron Merger Co. have no assets or operations. CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 165,878 $ — $ — $ 165,878 Receivables, net 138,657 37,424 — 176,081 Inventories, net 63,828 11,176 — 75,004 Prepaid expenses and other assets 9,030 142 — 9,172 Rental equipment, net 760,972 143,852 — 904,824 Property and equipment, net 89,952 11,837 — 101,789 Deferred financing costs, net 3,772 — — 3,772 Investment in guarantor subsidiaries 222,217 — (222,217 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,455,977 $ 233,957 $ (222,217 ) $ 1,467,717 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ - $ — $ — $ - Accounts payable 78,811 10,970 — 89,781 Manufacturer flooring plans payable 20,300 1,702 — 22,002 Accrued expenses payable and other liabilities 67,466 (2,371 ) — 65,095 Dividends payable 197 (47 ) — 150 Senior unsecured notes 944,088 — — 944,088 Capital leases payable — 1,486 — 1,486 Deferred income taxes 126,419 — — 126,419 Deferred compensation payable 1,903 — — 1,903 Total liabilities 1,239,184 11,740 — 1,250,924 Stockholders’ equity 216,793 222,217 (222,217 ) 216,793 Total liabilities and stockholders’ equity $ 1,455,977 $ 233,957 $ (222,217 ) $ 1,467,717 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 H&E Equipment 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 Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 395,275 $ 83,741 $ — $ 479,016 New equipment sales 166,730 36,571 — 203,301 Used equipment sales 84,741 22,588 — 107,329 Parts sales 92,073 15,311 — 107,384 Services revenues 52,807 10,066 — 62,873 Other 57,405 12,711 — 70,116 Total revenues 849,031 180,988 — 1,030,019 Cost of revenues: Rental depreciation 140,489 28,966 — 169,455 Rental expense 64,598 13,108 — 77,706 New equipment sales 148,163 32,539 — 180,702 Used equipment sales 59,481 14,651 — 74,132 Parts sales 66,974 10,739 — 77,713 Services revenues 17,851 3,260 — 21,111 Other 56,696 12,596 — 69,292 Total cost of revenues 554,252 115,859 — 670,111 Gross profit: Equipment rentals 190,188 41,667 — 231,855 New equipment sales 18,567 4,032 — 22,599 Used equipment sales 25,260 7,937 — 33,197 Parts sales 25,099 4,572 — 29,671 Services revenues 34,956 6,806 41,762 Other 709 115 — 824 Gross profit 294,779 65,129 — 359,908 Selling, general and administrative expenses 190,392 42,392 — 232,784 Equity in earnings of guarantor subsidiaries 16,136 — (16,136 ) — Merger breakup fee proceeds, net of merger costs 5,782 — 5,782 Gain from sales of property and equipment, net 2,435 2,574 — 5,009 Income from operations 128,740 25,311 (16,136 ) 137,915 Other income (expense): Interest expense (45,480 ) (9,478 ) — (54,958 ) Loss on early extinguishment of debt (25,363 ) — — (25,363 ) Other, net 1,447 303 — 1,750 Total other expense, net (69,396 ) (9,175 ) - (78,571 ) Income before benefit for income taxes 59,344 16,136 (16,136 ) 59,344 Benefit for income taxes (50,314 ) — — (50,314 ) Net income $ 109,658 $ 16,136 $ (16,136 ) $ 109,658 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2016 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 364,654 $ 80,573 $ — $ 445,227 New equipment sales 158,291 38,397 — 196,688 Used equipment sales 78,956 17,954 — 96,910 Parts sales 95,105 14,042 — 109,147 Services revenues 55,391 9,282 — 64,673 Other 53,276 12,216 — 65,492 Total revenues 805,673 172,464 — 978,137 Cost of revenues: Rental depreciation 134,484 27,931 — 162,415 Rental expense 59,263 12,431 — 71,694 New equipment sales 140,948 34,608 — 175,556 Used equipment sales 55,075 11,663 — 66,738 Parts sales 68,999 9,967 — 78,966 Services revenues 18,963 2,876 — 21,839 Other 52,861 12,457 — 65,318 Total cost of revenues 530,593 111,933 — 642,526 Gross profit (loss): Equipment rentals 170,907 40,211 — 211,118 New equipment sales 17,343 3,789 — 21,132 Used equipment sales 23,881 6,291 — 30,172 Parts sales 26,106 4,075 — 30,181 Services revenues 36,428 6,406 — 42,834 Other 415 (241 ) — 174 Gross profit 275,080 60,531 — 335,611 Selling, general and administrative expenses 187,369 40,760 — 228,129 Equity in earnings of guarantor subsidiaries 11,416 — (11,416 ) — Gain from sales of property and equipment, net 2,789 496 — 3,285 Income from operations 101,916 20,267 (11,416 ) 110,767 Other income (expense): Interest expense (44,503 ) (9,101 ) — (53,604 ) Other, net 1,617 250 — 1,867 Total other expense, net (42,886 ) (8,851 ) — (51,737 ) Income before provision for income taxes 59,030 11,416 (11,416 ) 59,030 Provision for income taxes 21,858 — — 21,858 Net income $ 37,172 $ 11,416 $ (11,416 ) $ 37,172 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 366,160 $ 76,864 $ — $ 443,024 New equipment sales 213,476 24,696 — 238,172 Used equipment sales 96,114 22,224 — 118,338 Parts sales 96,743 14,390 — 111,133 Services revenues 54,483 9,471 — 63,954 Other 53,051 12,159 — 65,210 Total revenues 880,027 159,804 — 1,039,831 Cost of revenues: Rental depreciation 135,511 26,578 — 162,089 Rental expense 59,384 12,566 — 71,950 New equipment sales 190,013 22,222 — 212,235 Used equipment sales 66,888 14,450 — 81,338 Parts sales 70,555 10,275 — 80,830 Services revenues 18,689 3,004 — 21,693 Other 51,763 12,201 — 63,964 Total cost of revenues 592,803 101,296 — 694,099 Gross profit (loss): Equipment rentals 171,265 37,720 — 208,985 New equipment sales 23,463 2,474 — 25,937 Used equipment sales 29,226 7,774 — 37,000 Parts sales 26,188 4,115 — 30,303 Services revenues 35,794 6,467 — 42,261 Other 1,288 (42 ) — 1,246 Gross profit 287,224 58,508 — 345,732 Selling, general and administrative expenses 183,235 36,991 — 220,226 Equity in earnings of guarantor subsidiaries 8,428 — (8,428 ) — Gain from sales of property and equipment, net 2,255 482 — 2,737 Income from operations 114,672 21,999 (8,428 ) 128,243 Other income (expense): Interest expense (40,303 ) (13,727 ) — (54,030 ) Other, net 1,307 156 — 1,463 Total other expense, net (38,996 ) (13,571 ) — (52,567 ) Income before provision for income taxes 75,676 8,428 (8,428 ) 75,676 Provision for income taxes 31,371 — — 31,371 Net income $ 44,305 $ 8,428 $ (8,428 ) $ 44,305 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 109,658 $ 16,136 $ (16,136 ) $ 109,658 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 20,742 3,048 — 23,790 Depreciation on rental equipment 140,489 28,966 — 169,455 Amortization of deferred financing costs 1,046 — — 1,046 Accretion of note discount, net of premium amortization 274 — — 274 Provision for losses on accounts receivable 3,148 784 — 3,932 Provision for inventory obsolescence 161 — — 161 Change in deferred income taxes (50,535 ) — — (50,535 ) Stock-based compensation expense 3,526 — — 3,526 Loss on early extinguishment of debt 25,363 25,363 Gain from sales of property and equipment, net (2,435 ) (2,574 ) — (5,009 ) Gain from sales of rental equipment, net (24,063 ) (7,819 ) — (31,882 ) Equity in earnings of guarantor subsidiaries (16,136 ) — 16,136 — Changes in operating assets and liabilities: Receivables (29,083 ) (10,929 ) — (40,012 ) Inventories (23,221 ) (8,550 ) — (31,771 ) Prepaid expenses and other assets (1,687 ) 28 — (1,659 ) Accounts payable 42,623 7,726 — 50,349 Manufacturer flooring plans payable (10,599 ) 1,821 — (8,778 ) Accrued expenses payable and other liabilities 8,660 (430 ) — 8,230 Deferred compensation payable 61 — — 61 Net cash provided by operating activities 197,992 28,207 — 226,199 Cash flows from investing activities: Purchases of property and equipment (17,852 ) (4,663 ) — (22,515 ) Purchases of rental equipment (198,988 ) (35,221 ) — (234,209 ) Proceeds from sales of property and equipment 3,528 3,978 — 7,506 Proceeds from sales of rental equipment 74,090 22,053 — 96,143 Investment in subsidiaries 14,128 — (14,128 ) — Net cash used in investing activities (125,094 ) (13,853 ) (14,128 ) (153,075 ) Cash flows from financing activities: Purchases of treasury stock (783 ) — — (783 ) Borrowings on senior secured credit facility 1,193,544 — — 1,193,544 Payments on senior secured credit facility (1,356,186 ) — — (1,356,186 ) Dividends paid (39,164 ) (8 ) — (39,172 ) Principal payments on senior unsecured notes due 2022 (630,000 ) — (630,000 ) Costs paid to tender and redeem senior unsecured notes due 2022 (23,336 ) — (23,336 ) Proceeds from issuance of senior unsecured notes due 2025 958,500 — 958,500 Payments of deferred financing costs (17,278 ) — (17,278 ) Payments of capital lease obligations — (218 ) — (218 ) Capital contributions — (14,128 ) 14,128 — Net cash provided by (used in) financing activities 85,297 (14,354 ) 14,128 85,071 Net increase in cash 158,195 — — 158,195 Cash, beginning of year 7,683 — — 7,683 Cash, end of year $ 165,878 $ — $ — $ 165,878 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2016 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 37,172 $ 11,416 $ (11,416 ) $ 37,172 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 24,194 3,088 — 27,282 Depreciation on rental equipment 134,484 27,931 — 162,415 Amortization of deferred financing costs 1,052 — — 1,052 Accretion of note discount, net of premium amortization 168 — — 168 Provision for losses on accounts receivable 2,616 521 — 3,137 Provision for inventory obsolescence 127 — — 127 Change in deferred income taxes 21,578 — — 21,578 Stock-based compensation expense 3,037 — — 3,037 Gain from sales of property and equipment, net (2,789 ) (496 ) — (3,285 ) Gain from sales of rental equipment, net (22,780 ) (6,223 ) — (29,003 ) Equity in earnings of guarantor subsidiaries (11,416 ) — 11,416 — Changes in operating assets and liabilities: Receivables 8,783 (4,629 ) — 4,154 Inventories 5,785 (1,518 ) — 4,267 Prepaid expenses and other assets 2,566 (25 ) — 2,541 Accounts payable (27,771 ) 426 — (27,345 ) Manufacturer flooring plans payable (31,534 ) (119 ) — (31,653 ) Accrued expenses payable and other liabilities 2,263 (596 ) — 1,667 Deferred compensation payable (332 ) — — (332 ) Net cash provided by operating activities 147,203 29,776 — 176,979 Cash flows from investing activities: Purchases of property and equipment (19,505 ) (3,390 ) — (22,895 ) Purchases of rental equipment (138,562 ) (41,147 ) — (179,709 ) Proceeds from sales of property and equipment 3,190 615 — 3,805 Proceeds from sales of rental equipment 67,282 17,107 — 84,389 Investment in subsidiaries 2,749 — (2,749 ) — Net cash used in investing activities (84,846 ) (26,815 ) (2,749 ) (114,410 ) Cash flows from financing activities: Purchases of treasury stock (561 ) — — (561 ) Borrowings on senior secured credit facility 966,146 — — 966,146 Payments on senior secured credit facility (988,361 ) — — (988,361 ) Dividends paid (39,057 ) (9 ) — (39,066 ) Payments of deferred financing costs - — - Payments of capital lease obligations — (203 ) — (203 ) Capital contributions — (2,749 ) 2,749 — Net cash used in financing activities (61,833 ) (2,961 ) 2,749 (62,045 ) Net increase in cash 524 — — 524 Cash, beginning of year 7,159 — — 7,159 Cash, end of year $ 7,683 $ — $ — $ 7,683 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 44,305 $ 8,428 $ (8,428 ) $ 44,305 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 21,443 2,925 — 24,368 Depreciation on rental equipment 135,511 26,578 — 162,089 Amortization of deferred financing costs 1,036 — — 1,036 Accretion of note discount, net of premium amortization 168 — — 168 Provision for losses on accounts receivable 3,223 218 — 3,441 Provision for inventory obsolescence 295 — — 295 Change in deferred income taxes 30,651 — — 30,651 Stock-based compensation expense 2,655 — — 2,655 Gain from sales of property and equipment, net (2,255 ) (482 ) — (2,737 ) Gain from sales of rental equipment, net (27,732 ) (7,402 ) — (35,134 ) Equity in earnings of guarantor subsidiaries (8,428 ) — 8,428 — Changes in operating assets and liabilities: Receivables 9,817 3,749 — 13,566 Inventories (12,168 ) (2,349 ) — (14,517 ) Prepaid expenses and other assets (882 ) (26 ) — (908 ) Accounts payable 13,298 138 — 13,436 Manufacturer flooring plans payable (31,167 ) — — (31,167 ) Accrued expenses payable and other liabilities (4,604 ) (391 ) — (4,995 ) Deferred compensation payable 68 — — 68 Net cash provided by operating activities 175,234 31,386 — 206,620 Cash flows from investing activities: Purchases of property and equipment (23,989 ) (2,808 ) — (26,797 ) Purchases of rental equipment (143,840 ) (34,932 ) — (178,772 ) Proceeds from sales of property and equipment 3,738 551 — 4,289 Proceeds from sales of rental equipment 80,093 19,428 — 99,521 Investment in subsidiaries 13,426 — (13,426 ) — Net cash used in investing activities (70,572 ) (17,761 ) (13,426 ) (101,759 ) Cash flows from financing activities: Purchases of treasury stock (470 ) — — (470 ) Borrowing on senior secured credit facility 982,961 — — 982,961 Payments on senior secured credit facility (1,058,023 ) — — (1,058,023 ) Payments of deferred financing cost (725 ) — — (725 ) Dividends paid (37,107 ) (7 ) — (37,114 ) Payments of capital lease obligations — (192 ) — (192 ) Capital contributions — (13,426 ) 13,426 - Net cash used in financing activities (113,364 ) (13,625 ) 13,426 (113,563 ) Net decrease in cash (8,702 ) — — (8,702 ) Cash, beginning of year 15,861 — — 15,861 Cash, end of year $ 7,159 $ — $ — $ 7,159 |
Validation And Qualifying Accou
Validation And Qualifying Accounts | 12 Months Ended |
Dec. 31, 2017 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2017, 2016 AND 2015 Description Balance at Beginning of Year Additions Charged to Costs and Expenses Deductions Balance at End of Year Year Ended December 31, 2017 Allowance for doubtful accounts receivable $ 3,769 $ 3,932 $ (3,928 ) $ 3,773 Allowance for inventory obsolescence 900 161 (114 ) 947 $ 4,669 $ 4,093 $ (4,042 ) $ 4,720 Year Ended December 31, 2016 Allowance for doubtful accounts receivable $ 4,729 $ 3,137 $ (4,097 ) $ 3,769 Allowance for inventory obsolescence 934 127 (161 ) 900 $ 5,663 $ 3,264 $ (4,258 ) $ 4,669 Year Ended December 31, 2015 Allowance for doubtful accounts receivable $ 3,288 $ 3,441 $ (2,000 ) $ 4,729 Allowance for inventory obsolescence 647 295 (8 ) 934 $ 3,935 $ 3,736 $ (2,008 ) $ 5,663 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation Our 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.” All significant intercompany accounts and transactions have been eliminated in these consolidated financial statements. Business combinations are included in the consolidated financial statements from their respective dates of acquisition. 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 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. |
Revenue Recognition | Revenue Recognition As noted in the discussion below (see “Recent Accounting Pronouncements” below), we will adopt as of January 1, 2018, updated FASB revenue recognition guidance (Topic 606). Topic 606 is an update to Topic 605, which was the revenue recognition standard in effect for all periods during each of the three years ended December 31, 2017, 2016 and 2015. For each of these years, we recognized revenue in accordance with two different accounting standards: (1) Topic 605 and (2) Topic 840, which is the lease standard. Pursuant to Topic 605, revenue generally is realized or realizable and earned when all of the following criteria are met: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred or services have been rendered; (3) the seller’s price to the buyer is fixed or determinable; and (4) collectibility is reasonably assured. Revenue from the sale of new and used equipment and parts is recognized at the time of delivery to, or pick-up by, the customer and when all obligations under the sales contract have been fulfilled, risk of ownership has been transferred and collectibility is reasonably assured. Services revenue is recognized at the time the services are rendered. Other revenues consist primarily of billings to customers for rental equipment delivery and damage waiver charges and are generally recognized at the time the service has been provided. We account for equipment that we rent as operating leases. Pursuant to Topic 840, we recognize revenue from equipment rentals in the period earned, regardless of the timing of the billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenue is earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across financial reporting periods, we record unbilled rental revenue and deferred rental revenue at the end of reporting periods so rental revenue earned is appropriately stated in the periods presented. |
Inventories | Inventories New and used equipment inventories are stated at the lower of cost or net realizable value, with cost determined by specific-identification. Inventories of parts and supplies are stated at the lower of the average cost or market. See also the “Recent Accounting Pronouncements” on page 48 for new accounting guidance related to measurement of inventories. |
Long-lived Assets and Goodwill | Long-lived Assets and Goodwill Rental Equipment The rental equipment we purchase is stated at cost and is depreciated over the estimated useful lives of the equipment using the straight-line method. Estimated useful lives vary based upon type of equipment. Generally, we depreciate cranes and aerial work platforms over a ten year estimated useful life, earthmoving equipment over a five year estimated useful life with a 25% salvage value, and industrial lift trucks over a seven year estimated useful life. Attachments and other smaller type equipment are depreciated generally over a three year estimated useful life. We periodically evaluate the appropriateness of remaining depreciable lives and any salvage value assigned to rental equipment. Ordinary repair and maintenance costs and property taxes are charged to operations as incurred. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. When rental equipment is sold or disposed of, the related cost and accumulated depreciation are removed from the respective accounts and any gains or losses are included in income. We receive individual offers for fleet on a continual basis, at which time we perform an analysis on whether or not to accept the offer. The rental equipment is not transferred to inventory under the held for sale model as the equipment is used to generate revenues until the equipment is sold. Property and Equipment Property and equipment are recorded at cost and are depreciated over the assets’ estimated useful lives using the straight-line method. Ordinary repair and maintenance costs are charged to operations as incurred. However, expenditures for additions or improvements that significantly extend the useful life of the asset are capitalized in the period incurred. At the time assets are sold or disposed of, the cost and accumulated depreciation are removed from their respective accounts and the related gains or losses are reflected in income. We capitalize interest on qualified construction projects. Costs associated with internally developed software are accounted for in accordance with FASB ASC 350-40, Internal-Use Software We periodically evaluate the appropriateness of remaining depreciable lives assigned to property and equipment. Leasehold improvements are amortized using the straight-line method over their estimated useful lives or the remaining term of the lease, whichever is shorter. Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Transportation equipment 5 years Buildings 39 years Office equipment 5 years Computer equipment 3 years Machinery and equipment 7 years In accordance with ASC 360, Property, Plant and Equipment Goodwill We have made acquisitions in the past that included the recognition of goodwill, which was determined based upon previous accounting principles. Pursuant to ASC 350, Intangibles-Goodwill and Other We evaluate goodwill for impairment at least annually, or more frequently if triggering events occur or other impairment indicators arise which might impair recoverability. Impairment of goodwill is evaluated at the reporting unit level. A reporting unit is defined as an operating segment (i.e. before aggregation or combination), or one level below an operating segment (i.e. a component). A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and segment management regularly reviews the operating results of that component. We have identified two components within our Rental operating segment and have determined that each of our other operating segments (New, Used, Parts and Service) represent a reporting unit, resulting in six total reporting units. ASC 350 allows entities to first use a qualitative approach to test goodwill for impairment. ASC 350 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not (a likelihood of greater than 50%) that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, the currently prescribed two-step goodwill test must be performed. Otherwise, the two-step goodwill impairment test is not required. Considerable judgment is required by management in using the qualitative approach under ASC 350 to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. We performed a qualitative assessment as of October 1, 2017 and there was no goodwill impairment. ASC 350 suggests that a qualitative assessment may become less relevant over time. In other words, the longer it has been since the last quantitative assessment, the more difficult it could be for a company to conclude that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount. Our last quantitative assessment of goodwill impairment was as of October 1, 2016. Step 1 of that test determined that the fair values of the goodwill reporting units exceeded their respective carrying values and, therefore, Step 2 of the goodwill test was not required, as there was no goodwill impairment at October 1, 2016. |
Closed Branch Facility Charges | Closed Branch Facility Charges We continuously monitor and identify branch facilities with revenues and operating margins that consistently fall below Company performance standards. Once identified, we continue to monitor these branches to determine if operating performance can be improved or if the performance is attributable to economic factors unique to the particular market with unfavorable long-term prospects. If necessary, branches with unfavorable long-term prospects are closed and the rental fleet and new and used equipment inventories are deployed to more profitable branches within our geographic footprint where demand is higher. We closed one branch during each of the years ended December 31, 2017 and 2016 in markets where long-term prospects did not support continued operations. No branches were closed during 2015. Under ASC 420, Exit or Disposal Cost Obligations |
Deferred Financing Costs and Initial Purchasers' Discounts | Deferred Financing Costs and Initial Purchasers’ Discounts Deferred financing costs include legal, accounting and other direct costs incurred in connection with the issuance and amendments thereto, of the Company’s debt. These costs are amortized over the terms of the related debt using the straight-line method which approximates amortization using the effective interest method. Initial purchasers’ discount and bond premium is the differential between the price paid to an issuer for the new issue and the prices (below and above, respectively) at which the securities are initially offered to the investing public. The amortization expense of deferred financing costs and bond premium and accretion of initial purchasers’ discounts are included in interest expense as an overall cost of the related financings. Such costs are presented in the balance sheet as a direct deduction from the carrying value of the associated debt liability, consistent with the presentation of a debt discount. |
Reserves for Claims | Reserves for Claims We are exposed to various claims relating to our business, including those for which we provide self-insurance. Claims for which we self-insure include: (1) workers compensation claims; (2) general liability claims by third parties for injury or property damage caused by our equipment or personnel; (3) automobile liability claims; and (4) employee health insurance claims. These types of claims may take a substantial amount of time to resolve and, accordingly, the ultimate liability associated with a particular claim, including claims incurred but not reported as of a period-end reporting date, may not be known for an extended period of time. Our methodology for developing self-insurance reserves is based on management estimates and independent third party actuarial estimates. Our estimation process considers, among other matters, the cost of known claims over time, cost inflation and incurred but not reported claims. These estimates may change based on, among other things, changes in our claim history or receipt of additional information relevant to assessing the claims. Further, these estimates may prove to be inaccurate due to factors such as adverse judicial determinations or other claim settlements at higher than estimated amounts. Accordingly, we may be required to increase or decrease our reserve levels. At December 31, 2017, our claims reserves related to workers compensation, general liability and automobile liability, which are included in “Accrued expenses and other liabilities” in our consolidated balance sheets, totaled $4.6 million and our health insurance reserves totaled $1.2 million. At December 31, 2016, our claims reserves related to workers compensation, general liability and automobile liability totaled $4.9 million and our health insurance reserves totaled $1.0 million. |
Sales Taxes | Sales Taxes We impose and collect significant amounts of sales taxes concurrent with our revenue-producing transactions with customers and remit those taxes to the various governmental agencies as prescribed by the taxing jurisdictions in which we operate. We present such taxes in our consolidated statements of income on a net basis. |
Advertising | Advertising Advertising costs are expensed as incurred and totaled $0.5 million, $1.0 million and $1.8 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Shipping and Handling Fees and Costs | Shipping and Handling Fees and Costs Shipping and handling fees billed to customers are recorded as revenues while the related shipping and handling costs are included in other cost of revenues. See discussion of shipping and handling revenues in Recent Accounting Pronouncements below with respect to the new revenue recognition guidance effective January 1, 2018. |
Income Taxes | Income Taxes The Company files a consolidated federal income tax return with its wholly-owned subsidiaries. The Company is a C-Corporation under the provisions of the Internal Revenue Code. We utilize the asset and liability approach to measure deferred tax assets and liabilities based on temporary differences existing at each balance sheet date using currently enacted tax rates in accordance with ASC 740. ASC 740 takes into account the differences between financial statement treatment and tax treatment of certain transactions. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in tax rate is recognized as income or expense in the period that includes the enactment date of that rate. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was signed into law. Included in the Act is a reduction in the corporate statutory tax rate from 35% to 21%, effective for us on January 1, 2018. Under ASC 740, the effects of changes in tax rates and laws are recognized in the period in which the new legislation is enacted. In the case of US federal income taxes, the enactment date is the date the bill becomes law (i.e., upon presidential signature). As of December 31, 2017, we have not completed our accounting for all the tax effects of the enactment of the Act. However, with respect to this legislation, we recorded a one-time decrease in income tax expense of $66.9 million in the fourth quarter of 2017, due to a re-measurement of our deferred tax assets and liabilities resulting from the decrease in the corporate federal income tax rate from 35% to 21%. In accordance with ASC 740, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax provisions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company recognizes both interest and penalties related to uncertain tax positions in net other income (expense). Our deferred tax calculation requires management to make certain estimates about future operations. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. |
Fair Value of Financial Instruments | 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 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 December 31, 2017 and 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. December 31, 2017 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 22,002 $ 18,737 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 3) 944,088 619,019 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,486 1,114 Letter of credit (Level 3) — 116 December 31, 2016 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.25% (Level 3) $ 30,780 $ 26,780 Senior unsecured notes due 2022 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 At December 31, 2017, the fair value of our senior unsecured notes due 2025 was based on the present value of the notes based on our incremental borrowing rate as these notes were not available (registered) on a bond trading market as of December 31, 2017. At December 31, 2016, the fair value of our senior unsecured notes due 2022 were based on quoted bond trading market prices of those notes. During 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. |
Concentrations of Credit and Supplier Risk | Concentrations of Credit and Supplier Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of trade accounts receivable. Credit risk can be negatively impacted by adverse changes in the economy or by disruptions in the credit markets. However, we believe that credit risk with respect to trade accounts receivable is somewhat mitigated by our large number of geographically diverse customers and our credit evaluation procedures. Although generally no collateral is required, when feasible, mechanics’ liens are filed and personal guarantees are signed to protect the Company’s interests. We maintain reserves for potential losses. We record trade accounts receivables at sales value and establish specific reserves for certain customer accounts identified as known collection problems due to insolvency, disputes or other collection issues. The amounts of the specific reserves estimated by management are based on the following assumptions and variables: the customer’s financial position, age of the customer’s receivables and changes in payment schedules. In addition to the specific reserves, management establishes a non-specific allowance for doubtful accounts by applying specific percentages to the different receivable aging categories (excluding the specifically reserved accounts). The percentage applied against the aging categories increases as the accounts become further past due. The allowance for doubtful accounts is charged with the write-off of uncollectible customer accounts. We purchase a significant amount of equipment from the same manufacturers with whom we have distribution agreements. During the year ended December 31, 2017, we purchased approximately 42% from three manufacturers (Grove/Manitowoc, Komatsu, and Genie Industries (Terex)) providing our rental and sales equipment. We believe that while there are alternative sources of supply for the equipment we purchase in each of the principal product categories, termination of one or more of our relationships with any of our major suppliers of equipment could have a material adverse effect on our business, financial condition or results of operation if we were unable to obtain adequate or timely rental and sales equipment. |
Income per Share | Income per Share Income per common share for the year ended December 31, 2017, 2016 and 2015 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 during the periods ended December 31, 2017, 2016 and 2015 were only 0.8%, 0.8% and 0.8% of total outstanding shares, respectively, and, consequently, were 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 as presented for the years ended December 31, 2017, 2016 and 2015. The following table sets forth the computation of basic and diluted net income per common share for the years ended December 31, (amounts in thousands, except per share amounts): 2017 2016 2015 Basic net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Net income per common share — basic $ 3.09 $ 1.05 $ 1.26 Diluted net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Effect of dilutive securities: Effect of dilutive stock options — — 14 Effect of dilutive non-vested stock 183 87 57 Weighted average number of common shares outstanding — diluted 35,699 35,480 35,343 Net income per common share — diluted $ 3.07 $ 1.05 $ 1.25 Common shares excluded from the denominator as anti-dilutive: Stock options — 4 14 Non-vested stock — 3 8 |
Stock-Based Compensation | Stock-Based Compensation We adopted our 2006 Stock-Based Incentive Compensation Plan (as amended and restated from time to time, the “Prior Stock Plan”) and over the ten years prior to June 2016, we had been granting awards under our Prior Stock Plan. The Prior Stock Plan expired pursuant to its terms in June 2016, and the Company is no longer able to grant equity awards under the Prior Stock Plan. At our annual meeting of stockholders in May 2016, our stockholders approved our 2016 Stock-Based Incentive Compensation Plan (the “2016 Plan” and collectively with the Prior Stock Plan, the “Stock Plans”). To the extent that awards granted under the Prior Stock Plan are forfeited or otherwise terminate for any reason whatsoever without an actual distribution or issuance of shares, the plan limit will be increased by such number of shares. The Stock Plans are administered by the Compensation Committee of our Board of Directors, which selects persons eligible to receive awards and determines the number of shares and/or options subject to each award, the terms, conditions, performance measures, if any, and other provisions of the award. Under the Stock Incentive Plan, we may offer deferred shares or restricted shares of our common stock and grant options, including both incentive stock options and nonqualified stock options, to purchase shares of our common stock. Shares available for future stock-based payment awards under our Stock Incentive Plan were 1,844,301 shares of common stock as of December 31, 2017. We account for our stock-based compensation plans using the fair value recognition provisions of Accounting Standards Codification 718, Stock Compensation Non-vested Stock From time to time, we issue shares of non-vested stock typically with vesting terms of three years. The following table summarizes our non-vested stock activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2016 322,355 $ 19.90 Granted 227,532 $ 17.39 Vested (136,765 ) $ 18.88 Forfeited (12,321 ) $ 18.83 Non-vested stock at December 31, 2016 400,801 $ 18.86 Granted 190,134 $ 22.94 Vested (131,807 ) $ 21.85 Forfeited (13,164 ) $ 19.50 Non-vested stock at December 31, 2017 445,964 $ 19.70 As of December 31, 2017, we had unrecognized compensation expense of approximately $4.8 million related to non-vested stock award payments that we expect to be recognized over a weighted average period of 2.0 years. Stock Options No stock options were granted during 2017, 2016 or 2015. At December 31, 2017, we had no unrecognized compensation expense related to prior stock option awards. No stock compensation expense was recognized in 2017, 2016 or 2015 related to stock options. The following table represents stock option activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Exercise Price(1) Weighted Average Contractual Life In Years Outstanding options at January 1, 2016 51,000 $ 17.80 1.5 Granted — — Exercised — — Canceled, forfeited or expired (46,500 ) 17.65 Outstanding options at December 31, 2016 4,500 $ 19.27 0.5 Granted — — Exercised — — Canceled, forfeited or expired (4,500 ) $ 19.27 Outstanding options at December 31, 2017 — Options exercisable at December 31, 2017 — |
Purchases of Company Common Stock | Purchases of Company Common Stock Purchases of our common stock are accounted for as treasury stock in the accompanying consolidated balance sheets using the cost method. Repurchased stock is included in authorized shares, but is not included in shares outstanding. |
Segment Reporting | Segment Reporting We have determined in accordance with ASC 280, Segment Reporting |
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 (Topic 606), which will supersede Accounting Standards Codification (“ASC”) Topic 605, Revenue Recognition, and other legacy industry-specific revenue recognition guidance. In August 2015, the FASB deferred the effective date of this new standard by one year. The FASB later issued ASU No. 2016-08, Revenue from Contracts with Customers (Topic 606) – Principal versus Agent Considerations, in March 2016, ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606) – Identifying Performance Obligations and Licensing, in April 2016, ASU 2016-12, Revenue from Contracts with Customers (Topic 606) – Narrow-Scope Improvements and Practical Expedients, in May 2016, and ASU 2016-20, Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers, in December 2016, all of which further clarified aspects of Topic 606. Topic 606 clarifies the principles for revenue recognition. Topic 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In doing so, entities will need to use more judgment and make more estimates than under current guidance. These judgments and estimates may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. Topic 606 also requires an entity to disclose sufficient qualitative and quantitative information surrounding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Topic 606 permits the use of either a retrospective application to each prior period presented or retrospective application with the cumulative effect of initially applying Topic 606 at the date of adoption. Topic 606 will become effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We will adopt Topic 606 as of January 1, 2018 using a full retrospective application to each prior period presented. Below is our evaluation of the impact from the adoption of Topic 606. Revenues from equipment rentals accounted for 46.5% of our total revenues for the year ended December 31, 2017. Based on our analysis of Topic 606, we have determined that the accounting for equipment rental revenues is outside the scope of Topic 606. Therefore, upon our adoption of the new revenue recognition guidance on January 1, 2018, we will recognize our revenues pursuant to two different accounting standards. Revenues from equipment rentals will continue to be accounted for pursuant to current lease accounting guidance until our adoption of the new lease accounting standard in 2019 (as further discussed below in the Topic 842 pending lease accounting guidance), while revenues from new and used equipment sales, parts and services revenues and other revenues will be subject to Topic 606 upon adoption and are further described below. Sales of new and used equipment accounted for 30.2% of our total revenues for the year ended December 31, 2017. Parts and services revenues comprised 16.5% of our total revenues for the year ended December 31, 2017. The primary impact to these revenue streams from the adoption of Topic 606 will relate to the accounting treatment of shipping and handling revenues, some of which shipping and handling revenues we currently include in other revenues in our consolidated statements of income. Other revenues comprised approximately 6.8% of our total revenues for the year ended December 31, 2017. Pursuant to Topic 606, shipping and handling activities that are performed before the customer obtains control of the good are not a separate promised service to the customer. Rather, shipping and handling activities fulfill an entity’s promise to transfer the good. While the timing of our revenue recognition related to our shipping and handling activities, such as hauling revenues related to new and used equipment sales, maintenance and repair services, as well as parts freight, will not change upon adoption of the new guidance, we believe that Topic 606 requires revenues related to shipping and handling activities to be treated as fulfillment activities when the customer obtains control of the good after the shipping and handling activities are performed. In such contract arrangements, shipping and handling revenues will be included and presented within our respective segmented revenues consolidated statement of income line items rather than in our non-segmented other revenues line item. Related shipping and handling costs included in the non-segmented other costs of revenues line item in our consolidated statements of income should likewise be conformed and presented within our respective segment costs of revenues line items. While this change will only impact how our shipping and handling activities are presented within our revenues (and costs of revenues) line items within the consolidated statements of income and does not impact total revenues or total costs of revenues, this change will impact our calculated gross profit (and gross margin) for our segmented and non-segmented revenues in comparison to how we have historically calculated those measures. Shipping and handling type revenues included in other revenues were approximately $7.9 million for the year ended December 31, 2017, or approximately 0.7% of total revenues. Implementing the above changes to our financial reporting processes will not result in a material change to our internal controls over financial reporting. With respect to shipping and handling activities related to our equipment rental operations, we have determined that such hauling activities are a separate performance obligation as control passes to the customer when the rental equipment leaves our facility. Therefore, we will continue to account for our rental equipment hauling activities as a separate performance obligation, resulting in no change to our historical presentation of hauling activities in other revenues (and other costs of revenues) in our consolidated statements of income. In February 2016, the FASB issued ASU 2016-02, Leases . Our operating leases include the real estate where all but 11 of our 80 branch locations are located as of December 31, 2017. Additionally, the Company leases numerous types of non-rental equipment. Given the size of our lease portfolio, we expect that the new standard will have a material effect on our consolidated balance sheets as a result of recognizing new right-of-use assets and lease liabilities for our existing operating leases. We have begun accumulating the information related to these leases but have not completed our comprehensive analysis of those leases and are unable to quantify the impact to our consolidated financial statements at this time. 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 Topic 606 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 Topic 842. While our evaluation of ASU 2016-02 is ongoing with respect to our equipment rental activities, we have tentatively concluded that no significant changes are expected to the accounting for our rental equipment revenues, as substantially all of our rental agreements with customers will continue to be treated as operating leases under the new standard. Accordingly, we do not expect material changes to our related rental agreement accounting processes or internal controls. 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 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. 2016-06, Derivatives and Hedging (Topic 815): Contingent Put and Call Options in Debt Instruments 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. |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property Plant and Equipment | Generally, we assign the following estimated useful lives to these categories: Category Estimated Useful Life Transportation equipment 5 years Buildings 39 years Office equipment 5 years Computer equipment 3 years Machinery and equipment 7 years |
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 December 31, 2017 and 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. December 31, 2017 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 4.50% (Level 3) $ 22,002 $ 18,737 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 3) 944,088 619,019 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 1,486 1,114 Letter of credit (Level 3) — 116 December 31, 2016 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.25% (Level 3) $ 30,780 $ 26,780 Senior unsecured notes due 2022 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 |
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 years ended December 31, (amounts in thousands, except per share amounts): 2017 2016 2015 Basic net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Net income per common share — basic $ 3.09 $ 1.05 $ 1.26 Diluted net income per share: Net income $ 109,658 $ 37,172 $ 44,305 Weighted average number of common shares outstanding 35,516 35,393 35,272 Effect of dilutive securities: Effect of dilutive stock options — — 14 Effect of dilutive non-vested stock 183 87 57 Weighted average number of common shares outstanding — diluted 35,699 35,480 35,343 Net income per common share — diluted $ 3.07 $ 1.05 $ 1.25 Common shares excluded from the denominator as anti-dilutive: Stock options — 4 14 Non-vested stock — 3 8 |
Schedule of Non-Vested Stock Activity | The following table summarizes our non-vested stock activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2016 322,355 $ 19.90 Granted 227,532 $ 17.39 Vested (136,765 ) $ 18.88 Forfeited (12,321 ) $ 18.83 Non-vested stock at December 31, 2016 400,801 $ 18.86 Granted 190,134 $ 22.94 Vested (131,807 ) $ 21.85 Forfeited (13,164 ) $ 19.50 Non-vested stock at December 31, 2017 445,964 $ 19.70 |
Schedule of Share Based Compensation Stock Options Activity | The following table represents stock option activity for the years ended December 31, 2017 and 2016: Number of Shares Weighted Average Exercise Price(1) Weighted Average Contractual Life In Years Outstanding options at January 1, 2016 51,000 $ 17.80 1.5 Granted — — Exercised — — Canceled, forfeited or expired (46,500 ) 17.65 Outstanding options at December 31, 2016 4,500 $ 19.27 0.5 Granted — — Exercised — — Canceled, forfeited or expired (4,500 ) $ 19.27 Outstanding options at December 31, 2017 — Options exercisable at December 31, 2017 — |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Summary of Receivables | Receivables consisted of the following at December 31, (amounts in thousands): 2017 2016 Trade receivables $ 172,522 $ 137,470 Unbilled rental revenue 6,291 5,384 Income tax receivables 997 949 Other 45 3 179,855 143,806 Less allowance for doubtful accounts (3,774 ) (3,769 ) Total receivables, net $ 176,081 $ 140,037 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following at December 31, (amounts in thousands): 2017 2016 New equipment $ 55,704 $ 34,451 Used equipment 2,421 3,461 Parts, supplies and other 16,879 15,997 Total inventories, net $ 75,004 $ 53,909 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |
Summary of Net Property and Equipment | Net property and equipment consisted of the following at December 31, (amounts in thousands): 2017 2016 Land $ 7,165 $ 7,054 Transportation equipment 93,550 89,168 Building and leasehold improvements 55,523 53,967 Office and computer equipment 53,256 51,971 Machinery and equipment 15,983 15,179 Property under capital leases 3,217 3,217 Construction in progress 4,595 3,748 233,289 224,304 Less accumulated depreciation and amortization (131,500 ) (118,812 ) Total net property and equipment $ 101,789 $ 105,492 |
Manufacturer Flooring Plans P33
Manufacturer Flooring Plans Payable (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text Block [Abstract] | |
Maturities of Manufacturer Flooring Plans Payable | Maturities (based on original financing terms) of the manufacturer flooring plans payable as of December 31, 2017 for each of the next three years ending December 31 are as follows (amounts in thousands): 2018 $ 11,345 2019 10,657 2020 — Thereafter — Total $ 22,002 |
Accrued Expenses Payable and 34
Accrued Expenses Payable and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables And Accruals [Abstract] | |
Summary of Accrued Expenses Payable and Other Liabilities | Accrued expenses payable and other liabilities consisted of the following at December 31, (amounts in thousands): 2017 2016 Payroll and related liabilities $ 20,429 $ 17,842 Sales, use and property taxes 9,635 9,925 Accrued interest 19,134 15,112 Accrued insurance 4,211 4,227 Deferred revenue 6,631 5,703 Other 5,055 4,024 Total accrued expenses payable and other liabilities $ 65,095 $ 56,833 |
Senior Unsecured Notes (Tables)
Senior Unsecured Notes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Senior Unsecured Notes [Member] | |
Debt Instrument [Line Items] | |
Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets | The following table reconciles our Senior Unsecured Notes to our Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2015 $ 627,306 Accretion of discount on Old Notes through December 31, 2016 1,055 Amortization of note premium on Old Notes through December 31, 2016 (887 ) Amortization of deferred financing costs on Old Notes through December 31, 2016 237 Balance at December 31, 2016 $ 627,711 Accretion of discount on Old Notes through August 24, 2017 683 Amortization of note premium on Old Notes through August 24, 2017 (574 ) Amortization of deferred financing costs on Old Notes through August 24, 2017 153 Aggregate principal amount paid on Old Notes (630,000 ) Writeoff of unaccreted discount on Old Notes 5,294 Writeoff of unamortized premium on Old Notes (4,452 ) Writeoff of deferred financing costs on Old Notes 1,185 Aggregate principal amount issued on New Notes 950,000 Notes discount and deferred transaction costs on New Notes (14,684 ) Note premium on New Notes 8,500 Accretion of discount on New Notes from August 24, 2017 through December 31, 2017 542 Amortization of note premium on New Notes from August 24, 2017 through December 31, 2017 (375 ) Amortization of deferred financing costs on New Notes from August 24, 2017 through December 31, 2017 105 Balance at December 31, 2017 $ 944,088 |
Capital Lease Obligations (Tabl
Capital Lease Obligations (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Future Minimum Capital Lease Payments | Future minimum capital lease payments, in the aggregate, existing at December 31, 2017 for each of the next five years ending December 31 and thereafter are as follows (amounts in thousands): 2018 $ 333 2019 333 2020 333 2021 333 2022 123 Thereafter 507 Total minimum lease payments 1,962 Less: amount representing interest (476 ) Present value of minimum lease payments $ 1,486 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) | Our income tax provision (benefit) for the years ended December 31, 2017, 2016 and 2015, consists of the following (amounts in thousands): Current Deferred Total Year ended December 31, 2017: U.S. Federal $ — $ (54,241 ) $ (54,241 ) State 220 3,707 3,927 $ 220 $ (50,534 ) $ (50,314 ) Year ended December 31, 2016: U.S. Federal $ — $ 21,516 $ 21,516 State 280 62 342 $ 280 $ 21,578 $ 21,858 Year ended December 31, 2015: U.S. Federal $ 85 $ 25,206 $ 25,291 State 634 5,446 6,080 $ 719 $ 30,652 $ 31,371 |
Deferred Income Tax Assets and Liabilities | Significant components of our deferred income tax assets and liabilities as of December 31 are as follows (amounts in thousands): 2017 2016 Deferred tax assets: Accounts receivable $ 929 $ 1,415 Inventories 239 347 Net operating losses 18,165 25,117 AMT and tax credits 3,565 3,522 Sec 263A costs 544 599 Accrued liabilities 2,767 4,238 Deferred compensation 1,132 1,001 Accrued interest 365 533 Stock-based compensation 181 283 Goodwill and intangible assets — 58 Other assets 531 414 28,418 37,527 Valuation allowance (732 ) (207 ) 27,686 37,320 Deferred tax liabilities: Property and equipment (152,235 ) (213,537 ) Investments (1,066 ) (1,618 ) Goodwill and intangible assets (804 ) — (154,105 ) (215,155 ) Net deferred tax liabilities $ (126,419 ) $ (177,835 ) |
Actual Income Tax Expense (Benefit) | The reconciliation between income taxes computed using the statutory federal income tax rate of 35% to the actual income tax expense (benefit) is below for the years ended December 31 (amounts in thousands): 2017 2016 2015 Computed tax at statutory rates $ 20,770 $ 20,660 $ 26,487 Permanent items - other 911 904 953 Permanent items - excess of tax deductible goodwill (2,130 ) — — State income tax, net of federal tax effect 2,563 2,115 3,892 Change in valuation allowance 397 207 — Change in uncertain tax positions (5,960 ) 66 39 Other - change in deferred state rate — (2,094 ) 0 Impact of the Act federal rate change (66,865 ) — — $ (50,314 ) $ 21,858 $ 31,371 |
Amounts of Gross Unrecognized Tax Benefits | A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): 2017 2016 Gross unrecognized tax benefits at January 1 $ 6,119 $ 6,035 Increases in tax positions taken in prior years 22 26 Decreases in tax positions taken in prior years (22 ) — Increases in tax positions taken in current year — 105 Decreases for tax positions taken in current year — — Settlements with taxing authorities — — Lapse in statute of limitations (6,013 ) (47 ) Gross unrecognized tax benefits at December 31 $ 106 $ 6,119 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Operating Lease Payments | Future minimum operating lease payments existing at December 31, 2017 for each of the next five years ending December 31 and thereafter are as follows (amounts in thousands): 2018 $ 20,171 2019 20,517 2020 19,379 2021 18,107 2022 16,555 Thereafter 85,978 $ 180,707 |
Summarized Quarterly Financia39
Summarized Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Unaudited Quarterly Financial Results of Operations | The following is a summary of our unaudited quarterly financial results of operations for the years ended December 31, 2017 and 2016 (amounts in thousands, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2017: Total revenues $ 226,828 $ 249,363 $ 259,162 $ 294,666 Income from operations (1) 21,325 28,668 47,654 40,268 Income (loss) before provision (benefit) for income taxes (2) 8,530 15,668 7,577 27,569 Net income (loss) (3) 5,390 9,878 8,462 85,928 Basic net income (loss) per common share (4) 0.15 0.28 0.24 2.41 Diluted net income (loss) per common share (4) 0.15 0.28 0.24 2.40 First Quarter Second Quarter Third Quarter Fourth Quarter 2016: Total revenues $ 247,010 $ 242,095 $ 244,686 $ 244,346 Income from operations 22,432 25,371 33,090 29,874 Income before provision for income taxes 9,455 12,707 20,007 16,861 Net income 5,574 7,503 11,665 12,430 Basic net income per common share (4) 0.16 0.21 0.33 0.35 Diluted net income per common share (4) 0.16 0.21 0.33 0.35 (1) (2) (3) (4) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Information about Reportable Segments | . The following table presents information about our reportable segments (amounts in thousands): Years Ended December 31, 2017 2016 2015 Segment Revenues: Equipment rentals $ 479,016 $ 445,227 $ 443,024 New equipment sales 203,301 196,688 238,172 Used equipment sales 107,329 96,910 118,338 Parts sales 107,384 109,147 111,133 Services revenues 62,873 64,673 63,954 Total segmented revenues 959,903 912,645 974,621 Non-Segmented revenues 70,116 65,492 65,210 Total revenues $ 1,030,019 $ 978,137 $ 1,039,831 Segment Gross Profit: Equipment rentals $ 231,855 $ 211,118 $ 208,985 New equipment sales 22,599 21,132 25,937 Used equipment sales 33,197 30,172 37,000 Parts sales 29,671 30,181 30,303 Services revenues 41,762 42,834 42,261 Total gross profit from segmented revenues 359,084 335,437 344,486 Non-Segmented gross profit 824 174 1,246 Total gross profit $ 359,908 $ 335,611 $ 345,732 December 31, 2017 2016 Segment identified assets: Equipment sales $ 58,125 $ 37,912 Equipment rentals 904,824 893,816 Parts and service 16,879 15,997 Total segment identified assets 979,828 947,725 Non-Segmented identified assets 487,889 293,886 Total assets $ 1,467,717 $ 1,241,611 |
Consolidating Financial Infor41
Consolidating Financial Information of Guarantor Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 165,878 $ — $ — $ 165,878 Receivables, net 138,657 37,424 — 176,081 Inventories, net 63,828 11,176 — 75,004 Prepaid expenses and other assets 9,030 142 — 9,172 Rental equipment, net 760,972 143,852 — 904,824 Property and equipment, net 89,952 11,837 — 101,789 Deferred financing costs, net 3,772 — — 3,772 Investment in guarantor subsidiaries 222,217 — (222,217 ) — Goodwill 1,671 29,526 — 31,197 Total assets $ 1,455,977 $ 233,957 $ (222,217 ) $ 1,467,717 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ - $ — $ — $ - Accounts payable 78,811 10,970 — 89,781 Manufacturer flooring plans payable 20,300 1,702 — 22,002 Accrued expenses payable and other liabilities 67,466 (2,371 ) — 65,095 Dividends payable 197 (47 ) — 150 Senior unsecured notes 944,088 — — 944,088 Capital leases payable — 1,486 — 1,486 Deferred income taxes 126,419 — — 126,419 Deferred compensation payable 1,903 — — 1,903 Total liabilities 1,239,184 11,740 — 1,250,924 Stockholders’ equity 216,793 222,217 (222,217 ) 216,793 Total liabilities and stockholders’ equity $ 1,455,977 $ 233,957 $ (222,217 ) $ 1,467,717 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2016 H&E Equipment 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 Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 395,275 $ 83,741 $ — $ 479,016 New equipment sales 166,730 36,571 — 203,301 Used equipment sales 84,741 22,588 — 107,329 Parts sales 92,073 15,311 — 107,384 Services revenues 52,807 10,066 — 62,873 Other 57,405 12,711 — 70,116 Total revenues 849,031 180,988 — 1,030,019 Cost of revenues: Rental depreciation 140,489 28,966 — 169,455 Rental expense 64,598 13,108 — 77,706 New equipment sales 148,163 32,539 — 180,702 Used equipment sales 59,481 14,651 — 74,132 Parts sales 66,974 10,739 — 77,713 Services revenues 17,851 3,260 — 21,111 Other 56,696 12,596 — 69,292 Total cost of revenues 554,252 115,859 — 670,111 Gross profit: Equipment rentals 190,188 41,667 — 231,855 New equipment sales 18,567 4,032 — 22,599 Used equipment sales 25,260 7,937 — 33,197 Parts sales 25,099 4,572 — 29,671 Services revenues 34,956 6,806 41,762 Other 709 115 — 824 Gross profit 294,779 65,129 — 359,908 Selling, general and administrative expenses 190,392 42,392 — 232,784 Equity in earnings of guarantor subsidiaries 16,136 — (16,136 ) — Merger breakup fee proceeds, net of merger costs 5,782 — 5,782 Gain from sales of property and equipment, net 2,435 2,574 — 5,009 Income from operations 128,740 25,311 (16,136 ) 137,915 Other income (expense): Interest expense (45,480 ) (9,478 ) — (54,958 ) Loss on early extinguishment of debt (25,363 ) — — (25,363 ) Other, net 1,447 303 — 1,750 Total other expense, net (69,396 ) (9,175 ) - (78,571 ) Income before benefit for income taxes 59,344 16,136 (16,136 ) 59,344 Benefit for income taxes (50,314 ) — — (50,314 ) Net income $ 109,658 $ 16,136 $ (16,136 ) $ 109,658 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2016 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 364,654 $ 80,573 $ — $ 445,227 New equipment sales 158,291 38,397 — 196,688 Used equipment sales 78,956 17,954 — 96,910 Parts sales 95,105 14,042 — 109,147 Services revenues 55,391 9,282 — 64,673 Other 53,276 12,216 — 65,492 Total revenues 805,673 172,464 — 978,137 Cost of revenues: Rental depreciation 134,484 27,931 — 162,415 Rental expense 59,263 12,431 — 71,694 New equipment sales 140,948 34,608 — 175,556 Used equipment sales 55,075 11,663 — 66,738 Parts sales 68,999 9,967 — 78,966 Services revenues 18,963 2,876 — 21,839 Other 52,861 12,457 — 65,318 Total cost of revenues 530,593 111,933 — 642,526 Gross profit (loss): Equipment rentals 170,907 40,211 — 211,118 New equipment sales 17,343 3,789 — 21,132 Used equipment sales 23,881 6,291 — 30,172 Parts sales 26,106 4,075 — 30,181 Services revenues 36,428 6,406 — 42,834 Other 415 (241 ) — 174 Gross profit 275,080 60,531 — 335,611 Selling, general and administrative expenses 187,369 40,760 — 228,129 Equity in earnings of guarantor subsidiaries 11,416 — (11,416 ) — Gain from sales of property and equipment, net 2,789 496 — 3,285 Income from operations 101,916 20,267 (11,416 ) 110,767 Other income (expense): Interest expense (44,503 ) (9,101 ) — (53,604 ) Other, net 1,617 250 — 1,867 Total other expense, net (42,886 ) (8,851 ) — (51,737 ) Income before provision for income taxes 59,030 11,416 (11,416 ) 59,030 Provision for income taxes 21,858 — — 21,858 Net income $ 37,172 $ 11,416 $ (11,416 ) $ 37,172 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2015 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 366,160 $ 76,864 $ — $ 443,024 New equipment sales 213,476 24,696 — 238,172 Used equipment sales 96,114 22,224 — 118,338 Parts sales 96,743 14,390 — 111,133 Services revenues 54,483 9,471 — 63,954 Other 53,051 12,159 — 65,210 Total revenues 880,027 159,804 — 1,039,831 Cost of revenues: Rental depreciation 135,511 26,578 — 162,089 Rental expense 59,384 12,566 — 71,950 New equipment sales 190,013 22,222 — 212,235 Used equipment sales 66,888 14,450 — 81,338 Parts sales 70,555 10,275 — 80,830 Services revenues 18,689 3,004 — 21,693 Other 51,763 12,201 — 63,964 Total cost of revenues 592,803 101,296 — 694,099 Gross profit (loss): Equipment rentals 171,265 37,720 — 208,985 New equipment sales 23,463 2,474 — 25,937 Used equipment sales 29,226 7,774 — 37,000 Parts sales 26,188 4,115 — 30,303 Services revenues 35,794 6,467 — 42,261 Other 1,288 (42 ) — 1,246 Gross profit 287,224 58,508 — 345,732 Selling, general and administrative expenses 183,235 36,991 — 220,226 Equity in earnings of guarantor subsidiaries 8,428 — (8,428 ) — Gain from sales of property and equipment, net 2,255 482 — 2,737 Income from operations 114,672 21,999 (8,428 ) 128,243 Other income (expense): Interest expense (40,303 ) (13,727 ) — (54,030 ) Other, net 1,307 156 — 1,463 Total other expense, net (38,996 ) (13,571 ) — (52,567 ) Income before provision for income taxes 75,676 8,428 (8,428 ) 75,676 Provision for income taxes 31,371 — — 31,371 Net income $ 44,305 $ 8,428 $ (8,428 ) $ 44,305 |
Condensed Consolidating Statement of Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 109,658 $ 16,136 $ (16,136 ) $ 109,658 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 20,742 3,048 — 23,790 Depreciation on rental equipment 140,489 28,966 — 169,455 Amortization of deferred financing costs 1,046 — — 1,046 Accretion of note discount, net of premium amortization 274 — — 274 Provision for losses on accounts receivable 3,148 784 — 3,932 Provision for inventory obsolescence 161 — — 161 Change in deferred income taxes (50,535 ) — — (50,535 ) Stock-based compensation expense 3,526 — — 3,526 Loss on early extinguishment of debt 25,363 25,363 Gain from sales of property and equipment, net (2,435 ) (2,574 ) — (5,009 ) Gain from sales of rental equipment, net (24,063 ) (7,819 ) — (31,882 ) Equity in earnings of guarantor subsidiaries (16,136 ) — 16,136 — Changes in operating assets and liabilities: Receivables (29,083 ) (10,929 ) — (40,012 ) Inventories (23,221 ) (8,550 ) — (31,771 ) Prepaid expenses and other assets (1,687 ) 28 — (1,659 ) Accounts payable 42,623 7,726 — 50,349 Manufacturer flooring plans payable (10,599 ) 1,821 — (8,778 ) Accrued expenses payable and other liabilities 8,660 (430 ) — 8,230 Deferred compensation payable 61 — — 61 Net cash provided by operating activities 197,992 28,207 — 226,199 Cash flows from investing activities: Purchases of property and equipment (17,852 ) (4,663 ) — (22,515 ) Purchases of rental equipment (198,988 ) (35,221 ) — (234,209 ) Proceeds from sales of property and equipment 3,528 3,978 — 7,506 Proceeds from sales of rental equipment 74,090 22,053 — 96,143 Investment in subsidiaries 14,128 — (14,128 ) — Net cash used in investing activities (125,094 ) (13,853 ) (14,128 ) (153,075 ) Cash flows from financing activities: Purchases of treasury stock (783 ) — — (783 ) Borrowings on senior secured credit facility 1,193,544 — — 1,193,544 Payments on senior secured credit facility (1,356,186 ) — — (1,356,186 ) Dividends paid (39,164 ) (8 ) — (39,172 ) Principal payments on senior unsecured notes due 2022 (630,000 ) — (630,000 ) Costs paid to tender and redeem senior unsecured notes due 2022 (23,336 ) — (23,336 ) Proceeds from issuance of senior unsecured notes due 2025 958,500 — 958,500 Payments of deferred financing costs (17,278 ) — (17,278 ) Payments of capital lease obligations — (218 ) — (218 ) Capital contributions — (14,128 ) 14,128 — Net cash provided by (used in) financing activities 85,297 (14,354 ) 14,128 85,071 Net increase in cash 158,195 — — 158,195 Cash, beginning of year 7,683 — — 7,683 Cash, end of year $ 165,878 $ — $ — $ 165,878 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2016 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 37,172 $ 11,416 $ (11,416 ) $ 37,172 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 24,194 3,088 — 27,282 Depreciation on rental equipment 134,484 27,931 — 162,415 Amortization of deferred financing costs 1,052 — — 1,052 Accretion of note discount, net of premium amortization 168 — — 168 Provision for losses on accounts receivable 2,616 521 — 3,137 Provision for inventory obsolescence 127 — — 127 Change in deferred income taxes 21,578 — — 21,578 Stock-based compensation expense 3,037 — — 3,037 Gain from sales of property and equipment, net (2,789 ) (496 ) — (3,285 ) Gain from sales of rental equipment, net (22,780 ) (6,223 ) — (29,003 ) Equity in earnings of guarantor subsidiaries (11,416 ) — 11,416 — Changes in operating assets and liabilities: Receivables 8,783 (4,629 ) — 4,154 Inventories 5,785 (1,518 ) — 4,267 Prepaid expenses and other assets 2,566 (25 ) — 2,541 Accounts payable (27,771 ) 426 — (27,345 ) Manufacturer flooring plans payable (31,534 ) (119 ) — (31,653 ) Accrued expenses payable and other liabilities 2,263 (596 ) — 1,667 Deferred compensation payable (332 ) — — (332 ) Net cash provided by operating activities 147,203 29,776 — 176,979 Cash flows from investing activities: Purchases of property and equipment (19,505 ) (3,390 ) — (22,895 ) Purchases of rental equipment (138,562 ) (41,147 ) — (179,709 ) Proceeds from sales of property and equipment 3,190 615 — 3,805 Proceeds from sales of rental equipment 67,282 17,107 — 84,389 Investment in subsidiaries 2,749 — (2,749 ) — Net cash used in investing activities (84,846 ) (26,815 ) (2,749 ) (114,410 ) Cash flows from financing activities: Purchases of treasury stock (561 ) — — (561 ) Borrowings on senior secured credit facility 966,146 — — 966,146 Payments on senior secured credit facility (988,361 ) — — (988,361 ) Dividends paid (39,057 ) (9 ) — (39,066 ) Payments of deferred financing costs - — - Payments of capital lease obligations — (203 ) — (203 ) Capital contributions — (2,749 ) 2,749 — Net cash used in financing activities (61,833 ) (2,961 ) 2,749 (62,045 ) Net increase in cash 524 — — 524 Cash, beginning of year 7,159 — — 7,159 Cash, end of year $ 7,683 $ — $ — $ 7,683 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2015 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 44,305 $ 8,428 $ (8,428 ) $ 44,305 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 21,443 2,925 — 24,368 Depreciation on rental equipment 135,511 26,578 — 162,089 Amortization of deferred financing costs 1,036 — — 1,036 Accretion of note discount, net of premium amortization 168 — — 168 Provision for losses on accounts receivable 3,223 218 — 3,441 Provision for inventory obsolescence 295 — — 295 Change in deferred income taxes 30,651 — — 30,651 Stock-based compensation expense 2,655 — — 2,655 Gain from sales of property and equipment, net (2,255 ) (482 ) — (2,737 ) Gain from sales of rental equipment, net (27,732 ) (7,402 ) — (35,134 ) Equity in earnings of guarantor subsidiaries (8,428 ) — 8,428 — Changes in operating assets and liabilities: Receivables 9,817 3,749 — 13,566 Inventories (12,168 ) (2,349 ) — (14,517 ) Prepaid expenses and other assets (882 ) (26 ) — (908 ) Accounts payable 13,298 138 — 13,436 Manufacturer flooring plans payable (31,167 ) — — (31,167 ) Accrued expenses payable and other liabilities (4,604 ) (391 ) — (4,995 ) Deferred compensation payable 68 — — 68 Net cash provided by operating activities 175,234 31,386 — 206,620 Cash flows from investing activities: Purchases of property and equipment (23,989 ) (2,808 ) — (26,797 ) Purchases of rental equipment (143,840 ) (34,932 ) — (178,772 ) Proceeds from sales of property and equipment 3,738 551 — 4,289 Proceeds from sales of rental equipment 80,093 19,428 — 99,521 Investment in subsidiaries 13,426 — (13,426 ) — Net cash used in investing activities (70,572 ) (17,761 ) (13,426 ) (101,759 ) Cash flows from financing activities: Purchases of treasury stock (470 ) — — (470 ) Borrowing on senior secured credit facility 982,961 — — 982,961 Payments on senior secured credit facility (1,058,023 ) — — (1,058,023 ) Payments of deferred financing cost (725 ) — — (725 ) Dividends paid (37,107 ) (7 ) — (37,114 ) Payments of capital lease obligations — (192 ) — (192 ) Capital contributions — (13,426 ) 13,426 - Net cash used in financing activities (113,364 ) (13,625 ) 13,426 (113,563 ) Net decrease in cash (8,702 ) — — (8,702 ) Cash, beginning of year 15,861 — — 15,861 Cash, end of year $ 7,159 $ — $ — $ 7,159 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Additional Information (Detail) | Oct. 02, 2017USD ($) | Oct. 01, 2016USD ($) | Dec. 31, 2017USD ($)BranchManufacturerLocationshares | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($)Branch | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2018 | Dec. 31, 2017USD ($)SegmentBranchManufacturerBusinessLocationshares | Dec. 31, 2016USD ($)Branchshares | Dec. 31, 2015USD ($)Branchshares | Jan. 01, 2017USD ($) |
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Salvage value | 25.00% | 25.00% | |||||||||||||
Impairment loss related to property and equipment | $ 0 | $ 0 | $ 0 | ||||||||||||
Number of operating segments | Segment | 6 | ||||||||||||||
Minimum percentage of likelihood that fair value of goodwill more than carrying value | 50.00% | 50.00% | |||||||||||||
Goodwill impairment | $ 0 | $ 0 | |||||||||||||
Number of branches closed | Branch | 1 | 1 | 1 | 1 | 0 | ||||||||||
Workers' compensation, general liability and automobile liability | $ 4,600,000 | $ 4,900,000 | $ 4,600,000 | $ 4,900,000 | |||||||||||
Health insurance reserves | $ 1,200,000 | 1,000,000 | 1,200,000 | 1,000,000 | |||||||||||
Advertising costs | $ 500,000 | 1,000,000 | $ 1,800,000 | ||||||||||||
Statutory federal income tax rate | 35.00% | ||||||||||||||
One-time decrease in income tax expense from re-measurement of deferred tax assets and liabilities | $ 66,900,000 | ||||||||||||||
Recognized income tax provisions | 50.00% | ||||||||||||||
Transfer of financial assets | $ 0 | 0 | |||||||||||||
Transfer of financial liabilities | $ 0 | $ 0 | |||||||||||||
No. of manufacturers | Manufacturer | 3 | 3 | |||||||||||||
Restricted common shares, percentage | 0.80% | 0.80% | 0.80% | ||||||||||||
Issue of shares of non-vested period | 3 years | ||||||||||||||
Unrecognized compensation expense related to non-vested stock | $ 4,800,000 | $ 4,800,000 | |||||||||||||
Expected non-vested stock recognized over a weighted-average period | 2 years | ||||||||||||||
Stock options, granted | shares | 0 | 0 | 0 | ||||||||||||
Unrecognized compensation expense related to stock option awards | 0 | $ 0 | |||||||||||||
Number of reportable segment | Segment | 5 | ||||||||||||||
Number of principal activities | Business | 5 | ||||||||||||||
Revenues | $ 294,666,000 | $ 259,162,000 | $ 249,363,000 | $ 226,828,000 | $ 244,346,000 | $ 244,686,000 | $ 242,095,000 | $ 247,010,000 | $ 1,030,019,000 | $ 978,137,000 | $ 1,039,831,000 | ||||
Number of branch locations | Location | 11 | 11 | |||||||||||||
Operating leases include real estate, number of branch location located | Location | 80 | 80 | |||||||||||||
ASU 2016-09 [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Excess tax benefits recognized as discrete item in income tax expense | $ 100,000 | $ 100,000 | |||||||||||||
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 | $ 900,000 | ||||||||||||||
Maximum [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Lease term | 12 months | ||||||||||||||
Other [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Revenues | $ 70,116,000 | 65,492,000 | 65,210,000 | ||||||||||||
Other [Member] | Shipping and Handling Type Revenues [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Revenues | 7,900,000 | ||||||||||||||
Stock Options [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Compensation expense | $ 0 | $ 0 | $ 0 | ||||||||||||
2016 Stock-Based Incentive Compensation Plan [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Stock-Based incentive compensation plan | shares | 1,844,301 | 1,844,301 | |||||||||||||
Rental and Sales Equipment Manufacturers [Member] | Property, Plant and Equipment [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 42.00% | ||||||||||||||
Product Concentration Risk [Member] | Revenues [Member] | Other [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 6.80% | ||||||||||||||
Product Concentration Risk [Member] | Revenues [Member] | Other [Member] | Shipping and Handling Type Revenues [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 0.70% | ||||||||||||||
Product Concentration Risk [Member] | Revenues [Member] | Equipment Rentals [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 46.50% | ||||||||||||||
Product Concentration Risk [Member] | Revenues [Member] | New and Used Equipment [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 30.20% | ||||||||||||||
Product Concentration Risk [Member] | Revenues [Member] | Parts and Services Revenues [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Percentage of revenue/purchase | 16.50% | ||||||||||||||
Fair Value [Member] | Level 1 [Member] | Senior Unsecured Notes Due 2022 [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Senior unsecured notes, due year | 2,022 | ||||||||||||||
Fair Value [Member] | Level 3 [Member] | Senior Unsecured Notes Due 2025 [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Senior unsecured notes, due year | 2,025 | ||||||||||||||
Scenario Forecast [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Statutory federal income tax rate | 21.00% | ||||||||||||||
Cranes and Aerial Work Platform [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Estimated useful life | 10 years | ||||||||||||||
Earthmoving Equipment [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Estimated useful life | 5 years | ||||||||||||||
Industrial Lift Trucks [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Estimated useful life | 7 years | ||||||||||||||
Attachments and Other Equipment [Member] | |||||||||||||||
Summary Of Significant Accounting Policy [Line Items] | |||||||||||||||
Estimated useful life | 3 years |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Transportation Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 39 years |
Office Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Detail) - USD ($) $ in Thousands | Dec. 31, 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% and 5.25%, respectively (Level 3) | $ 22,002 | $ 30,780 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 1,486 | 1,704 |
Level 3 [Member] | Carrying Amount [Member] | Senior Unsecured Notes Due 2025 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2025 and 2022 with interest computed at 5.625% (Level 3) and 7.0% (Level 1), respectively | 944,088 | |
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% and 5.25%, respectively (Level 3) | 18,737 | 26,780 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 1,114 | 1,164 |
Letter of credit (Level 3) | 116 | 155 |
Level 3 [Member] | Fair Value [Member] | Senior Unsecured Notes Due 2025 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2025 and 2022 with interest computed at 5.625% (Level 3) and 7.0% (Level 1), respectively | $ 619,019 | |
Level 1 [Member] | Carrying Amount [Member] | Senior Unsecured Notes Due 2022 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2025 and 2022 with interest computed at 5.625% (Level 3) and 7.0% (Level 1), respectively | 627,711 | |
Level 1 [Member] | Fair Value [Member] | Senior Unsecured Notes Due 2022 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes due 2025 and 2022 with interest computed at 5.625% (Level 3) and 7.0% (Level 1), respectively | $ 663,075 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 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% | 5.25% |
Capital lease payable, interest rate, minimum | 5.929% | 5.929% |
Capital lease payable interest rate, maximum | 9.55% | 9.55% |
Carrying Amount [Member] | Level 3 [Member] | Senior Unsecured Notes Due 2025 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2,025 | |
Senior unsecured notes, interest rate | 5.625% | |
Carrying Amount [Member] | Level 1 [Member] | Senior Unsecured Notes Due 2022 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2,022 | |
Senior unsecured notes, interest rate | 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% | 5.25% |
Capital lease payable, interest rate, minimum | 5.929% | 5.929% |
Capital lease payable interest rate, maximum | 9.55% | 9.55% |
Fair Value [Member] | Level 3 [Member] | Senior Unsecured Notes Due 2025 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2,025 | |
Senior unsecured notes, interest rate | 5.625% | |
Fair Value [Member] | Level 1 [Member] | Senior Unsecured Notes Due 2022 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2,022 | |
Senior unsecured notes, interest rate | 7.00% |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - 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 | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Basic net income per share: | |||||||||||
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | $ 109,658 | $ 37,172 | $ 44,305 |
Weighted average number of common shares outstanding | 35,516 | 35,393 | 35,272 | ||||||||
Net income per common share — basic | $ 2.41 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.09 | $ 1.05 | $ 1.26 |
Diluted net income per share: | |||||||||||
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | $ 109,658 | $ 37,172 | $ 44,305 |
Weighted average number of common shares outstanding | 35,516 | 35,393 | 35,272 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average number of common shares outstanding — diluted | 35,699 | 35,480 | 35,343 | ||||||||
Net income per common share — diluted | $ 2.40 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.07 | $ 1.05 | $ 1.25 |
Stock Options [Member] | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive stock options and non-vested stock | 14 | ||||||||||
Common shares excluded from the denominator as anti-dilutive: | |||||||||||
Common shares excluded from the denominator as anti-dilutive | 4 | 14 | |||||||||
Non-vested restricted stock [Member] | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive stock options and non-vested stock | 183 | 87 | 57 | ||||||||
Common shares excluded from the denominator as anti-dilutive: | |||||||||||
Common shares excluded from the denominator as anti-dilutive | 3 | 8 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Schedule of Non-Vested Stock Activity (Detail) - 2006 Stock-Based Incentive Compensation Plan [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Nonvested stock, beginning balance, Number of Shares | 400,801 | 322,355 |
Granted, Number of Shares | 190,134 | 227,532 |
Vested, Number of Shares | (131,807) | (136,765) |
Forfeited, Number of Shares | (13,164) | (12,321) |
Nonvested stock, ending balance, Number of Shares | 445,964 | 400,801 |
Nonvested stock, beginning balance, Weighted Average Grant Date Fair Value | $ 18.86 | $ 19.90 |
Granted, Weighted Average Grant Date Fair Value | 22.94 | 17.39 |
Vested, Weighted Average Grant Date Fair Value | 21.85 | 18.88 |
Forfeited, Weighted Average Grant Date Fair Value | 19.50 | 18.83 |
Nonvested stock, ending balance, Weighted Average Grant Date Fair Value | $ 19.70 | $ 18.86 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Schedule of Share Based Compensation Stock Options Activity (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Options, Granted, Number of Shares | 0 | 0 | 0 |
2006 Stock-Based Incentive Compensation Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock Options, Outstanding, Number of Shares, Beginning Balance | 4,500 | 51,000 | |
Stock Options, Canceled, forfeited or expired, Number of Shares | (4,500) | (46,500) | |
Stock Options, Outstanding, Number of Shares, Ending Balance | 4,500 | 51,000 | |
Stock Options, Outstanding, Weighted Average Exercise Price, Beginning Balance | $ 19.27 | $ 17.80 | |
Stock Options, Canceled, forfeited or expired, Weighted Average Exercise Price | $ 19.27 | 17.65 | |
Stock Options, Outstanding, Weighted Average Exercise Price, Ending Balance | $ 19.27 | $ 17.80 | |
Stock Options, Outstanding, Weighted Average Contractual Life In Years | 6 months | 1 year 6 months |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 16, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Jul. 14, 2017 |
Business Acquisition [Line Items] | |||||
Merger agreement, date of termination | Aug. 17, 2017 | ||||
Merger breakup fee proceeds, net of merger costs | $ 5,800 | $ 6,500 | $ 5,782 | ||
Neff Corporation [Member] | |||||
Business Acquisition [Line Items] | |||||
Fee on termination of proposed merger | $ 13,200 | ||||
Merger agreement termination fee received | $ 13,200 | ||||
Estimated transaction costs related to proposed merger | 6,700 | ||||
CEC [Member] | |||||
Business Acquisition [Line Items] | |||||
Estimated transaction costs related to proposed merger | $ 800 |
Receivables - Summary of Receiv
Receivables - Summary of Receivables (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Receivables [Abstract] | ||
Trade receivables | $ 172,522 | $ 137,470 |
Unbilled rental revenue | 6,291 | 5,384 |
Income tax receivables | 997 | 949 |
Other | 45 | 3 |
Total receivables | 179,855 | 143,806 |
Less allowance for doubtful accounts | (3,774) | (3,769) |
Total receivables, net | $ 176,081 | $ 140,037 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Total inventories, net | $ 75,004 | $ 53,909 |
New Equipment Sales [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | 55,704 | 34,451 |
Used Equipment Sales [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | 2,421 | 3,461 |
Parts, Supplies and Other [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | $ 16,879 | $ 15,997 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory Disclosure [Abstract] | ||
Net of reserves for inventory obsolescence | $ 947 | $ 900 |
Property and Equipment - Summar
Property and Equipment - Summary of Net Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 233,289 | $ 224,304 |
Less accumulated depreciation and amortization | (131,500) | (118,812) |
Total net property and equipment | 101,789 | 105,492 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 7,165 | 7,054 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 93,550 | 89,168 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 55,523 | 53,967 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 53,256 | 51,971 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 15,983 | 15,179 |
Property under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 3,217 | 3,217 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 4,595 | $ 3,748 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization of property and equipment | $ 23.8 | $ 27.3 | $ 27.3 |
Manufacturer Flooring Plans P55
Manufacturer Flooring Plans Payable - Additional Information (Detail) - Manufacturer Flooring Plans Payable [Member] | Dec. 31, 2017 |
Schedule Of Long Term Debt [Line Items] | |
Debt instrument interest rate, minimum | 0.00% |
Debt instrument interest rate, maximum | 4.50% |
Manufacturer Flooring Plans P56
Manufacturer Flooring Plans Payable - Maturities of Manufacturer Flooring Plans Payable (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Schedule Of Long Term Debt [Line Items] | ||
Total | $ 22,002 | $ 30,780 |
Manufacturer Flooring Plans Payable [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
2,018 | 11,345 | |
2,019 | 10,657 | |
Total | $ 22,002 |
Accrued Expenses Payable and 57
Accrued Expenses Payable and Other Liabilities - Accrued Expenses Payable and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Payable And Accrued Liabilities Current And Noncurrent [Abstract] | ||
Payroll and related liabilities | $ 20,429 | $ 17,842 |
Sales, use and property taxes | 9,635 | 9,925 |
Accrued interest | 19,134 | 15,112 |
Accrued insurance | 4,211 | 4,227 |
Deferred revenue | 6,631 | 5,703 |
Other | 5,055 | 4,024 |
Total accrued expenses payable and other liabilities | $ 65,095 | $ 56,833 |
Senior Unsecured Notes - Additi
Senior Unsecured Notes - Additional Information (Detail) - USD ($) | Nov. 22, 2017 | Sep. 25, 2017 | Aug. 24, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | |||||
Estimated offering expenses | $ 3,772,000 | $ 1,964,000 | |||
Add-on Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 200,000,000 | ||||
Senior unsecured notes, interest rate | 5.625% | ||||
Senior unsecured notes, maturity year | 2,025 | ||||
Net proceeds from sale of notes | $ 209,200 | ||||
Price percentage for Add-on Notes, Principal amount | 104.25% | ||||
5.6250% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Aggregate principal amount | $ 750,000,000 | ||||
Senior unsecured notes, interest rate | 5.625% | ||||
Senior unsecured notes, maturity year | 2,025 | ||||
Estimated offering expenses | $ 10,300,000 | ||||
Net proceeds from sale of notes | $ 739,700,000 | ||||
Redemption price percentage as equal to principal amount of old notes to be redeemed | 101.00% | ||||
Principal payments due until maturity | $ 0 | ||||
Maturity date of notes | Sep. 1, 2025 | ||||
5.6250% Senior Notes [Member] | Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Percentage of principal amount of new notes to be redeemed | 40.00% | ||||
7% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, interest rate | 7.00% | ||||
Senior unsecured notes, maturity year | 2,022 | ||||
Repurchase of notes | $ 329,700,000 | ||||
Early tender deadline amount received on debt instrument | 1,038.90 | ||||
Principal amount of old notes | $ 1,000 | ||||
Remaining principal amount outstanding of old notes redeemed | $ 300,300,000 | ||||
Redemption price percentage as equal to principal amount of old notes to be redeemed | 103.50% |
Senior Unsecured Notes - Reconc
Senior Unsecured Notes - Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | 4 Months Ended | 8 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Aug. 24, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | |||||
Senior unsecured notes, beginning balance | $ 627,711 | $ 627,711 | |||
Amortization of deferred financing costs | 1,046 | $ 1,052 | $ 1,036 | ||
Senior unsecured notes, ending balance | $ 944,088 | 944,088 | 627,711 | ||
Senior Unsecured Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Senior unsecured notes, beginning balance | 627,711 | 627,711 | 627,306 | ||
Senior unsecured notes, ending balance | 944,088 | 944,088 | 627,711 | $ 627,306 | |
Senior Unsecured Notes [Member] | 7% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Accretion of discount | 683 | 1,055 | |||
Amortization of note premium | (574) | (887) | |||
Amortization of deferred financing costs | $ 153 | $ 237 | |||
Aggregate principal amount paid | (630,000) | ||||
Writeoff of unaccreted discount | 5,294 | ||||
Writeoff of unamortized premium | (4,452) | ||||
Writeoff of deferred financing costs | 1,185 | ||||
Senior Unsecured Notes [Member] | 5.6250% Senior Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Accretion of discount | 542 | ||||
Amortization of note premium | (375) | ||||
Amortization of deferred financing costs | $ 105 | ||||
Aggregate principal amount issued | 950,000 | ||||
Notes discount and deferred transaction costs | (14,684) | ||||
Note premium | $ 8,500 |
Senior Secured Credit Facility
Senior Secured Credit Facility - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Feb. 15, 2018 | Dec. 22, 2017 | Dec. 21, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | |||||
Outstanding letters of credit | $ 7,700,000 | $ 7,700,000 | |||
Maximum [Member] | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee margin percentage | 0.375% | ||||
Maximum [Member] | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Margin rate lowered in applicable to Letter of Credit | 2.00% | ||||
Maximum [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin Percentage | 1.00% | ||||
Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin Percentage | 2.00% | ||||
Minimum [Member] | |||||
Debt Instrument [Line Items] | |||||
Unused commitment fee margin percentage | 0.25% | ||||
Minimum [Member] | Letter of Credit [Member] | |||||
Debt Instrument [Line Items] | |||||
Margin rate lowered in applicable to Letter of Credit | 1.50% | ||||
Minimum [Member] | Base Rate [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin Percentage | 0.50% | ||||
Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||||
Debt Instrument [Line Items] | |||||
Applicable margin Percentage | 1.50% | ||||
Wells Fargo Capital Finance, LLC [Member] | Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 750,000,000 | ||||
Revolving Credit Facility [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 750,000,000 | $ 602,500,000 | |||
Debt instrument maturity date description | Extends the maturity date of the credit facility from May 21, 2019 to December 22, 2022 | ||||
Uncommitted incremental revolving capacity | 250,000,000 | $ 150,000,000 | |||
Outstanding letters of credit | $ 0 | ||||
Available borrowings under our senior secured credit facility | $ 742,300,000 | ||||
Revolving Credit Facility [Member] | Subsequent Event [Member] | |||||
Debt Instrument [Line Items] | |||||
Outstanding letters of credit | $ 7,700,000 | ||||
Available borrowings under our senior secured credit facility | $ 742,300,000 | ||||
Letter of Credit Sub-Facility, and Guaranty [Member] | |||||
Debt Instrument [Line Items] | |||||
Existing credit facility with its lenders | $ 30,000,000 |
Capital Lease Obligations - Add
Capital Lease Obligations - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2017Lease_Agreement | |
Capital Lease Obligations [Line Items] | |
Number of capital lease obligations | 2 |
Capital Lease Obligations One [Member] | |
Capital Lease Obligations [Line Items] | |
Capital lease obligations expiring | 2,022 |
Capital Lease Obligations Two [Member] | |
Capital Lease Obligations [Line Items] | |
Capital lease obligations expiring | 2,029 |
Capital Lease Obligations - Fut
Capital Lease Obligations - Future Minimum Capital Lease Payments (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Capital Leases Future Minimum Payments Net Present Value [Abstract] | ||
2,018 | $ 333 | |
2,019 | 333 | |
2,020 | 333 | |
2,021 | 333 | |
2,022 | 123 | |
Thereafter | 507 | |
Total minimum lease payments | 1,962 | |
Less: amount representing interest | (476) | |
Present value of minimum lease payments | $ 1,486 | $ 1,704 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | |||
Statutory federal income tax rate | 35.00% | ||
One-time decrease in income tax expense from re-measurement of deferred tax assets and liabilities | $ 66,900 | ||
Federal net operating loss carry forwards | $ 83,400 | ||
Expire in varying amounts for federal net operating loss carry forwards | 2030 through 2036 | ||
Federal alternative minimum tax credit carry forwards | $ 3,000 | ||
General business credit carry forwards | $ 300 | ||
Expire in varying amounts for business credit carry forwards | 2026 and 2036 | ||
State income tax credits expiration date | 2,018 | ||
State income tax credits carry forward | $ 200 | ||
State net operating loss carry forward, valuation allowance | 400 | ||
Unrecognized tax benefits | 100 | ||
Lapse in statute of limitations related to unrecognized tax benefits | 6,013 | $ 47 | |
Decrease in income tax expense resulting from lapse of statute limitations in unrecognized tax benefits | $ 5,900 | ||
Scenario Forecast [Member] | |||
Significant Change In Unrecognized Tax Benefits Is Reasonably Possible [Line Items] | |||
Statutory federal income tax rate | 21.00% |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal, Current | $ 85 | ||
U.S. Federal, Deferred | $ (54,241) | $ 21,516 | 25,206 |
U.S. Federal, Total | (54,241) | 21,516 | 25,291 |
State, Current | 220 | 280 | 634 |
State, Deferred | 3,707 | 62 | 5,446 |
State, Total | 3,927 | 342 | 6,080 |
Current, Total | 220 | 280 | 719 |
Deferred, Total | (50,534) | 21,578 | 30,652 |
Total | $ (50,314) | $ 21,858 | $ 31,371 |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Accounts receivable | $ 929 | $ 1,415 |
Inventories | 239 | 347 |
Net operating losses | 18,165 | 25,117 |
AMT and tax credits | 3,565 | 3,522 |
Sec 263A costs | 544 | 599 |
Accrued liabilities | 2,767 | 4,238 |
Deferred compensation | 1,132 | 1,001 |
Accrued interest | 365 | 533 |
Stock-based compensation | 181 | 283 |
Goodwill and intangible assets | 58 | |
Other assets | 531 | 414 |
Deferred tax assets, Total | 28,418 | 37,527 |
Valuation allowance | (732) | (207) |
Deferred tax assets, net of valuation allowance, Total | 27,686 | 37,320 |
Deferred tax liabilities: | ||
Property and equipment | (152,235) | (213,537) |
Investments | (1,066) | (1,618) |
Goodwill and intangible assets | (804) | |
Deferred tax liabilities, Total | (154,105) | (215,155) |
Net deferred tax liabilities | $ (126,419) | $ (177,835) |
Income Taxes - Actual Income Ta
Income Taxes - Actual Income Tax Expense (benefit) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Computed tax at statutory rates | $ 20,770 | $ 20,660 | $ 26,487 | |
Permanent items - other | 911 | 904 | 953 | |
Permanent items - excess of tax deductible goodwill | (2,130) | |||
State income tax, net of federal tax effect | 2,563 | 2,115 | 3,892 | |
Change in valuation allowance | 397 | 207 | ||
Change in uncertain tax positions | (5,960) | 66 | 39 | |
Other - change in deferred state rate | (2,094) | 0 | ||
Impact of the Act federal rate change | $ (66,900) | (66,865) | ||
Total | $ (50,314) | $ 21,858 | $ 31,371 |
Income Taxes - Amounts of Gross
Income Taxes - Amounts of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Gross unrecognized tax benefits at January 1 | $ 6,119 | $ 6,035 |
Increases in tax positions taken in prior years | 22 | 26 |
Decreases in tax positions taken in prior years | (22) | |
Increases in tax positions taken in current year | 105 | |
Decreases for tax positions taken in current year | 0 | 0 |
Lapse in statute of limitations | (6,013) | (47) |
Gross unrecognized tax benefits at December 31 | $ 106 | $ 6,119 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments And Contingencies Disclosure [Line Items] | |||
Rent expense on property leases and equipment leases | $ 20.1 | $ 18.3 | $ 15.5 |
Outstanding letters of credit | $ 7.7 | $ 7.7 | |
Letter of Credit [Member] | |||
Commitments And Contingencies Disclosure [Line Items] | |||
Expiration date of letter of credit | Jan. 31, 2018 | ||
Renewed letter of credit | $ 7.7 | ||
Expiration date of renewed letter of credit | 2019-01 | ||
Line of credit expiry period | 1 year |
Commitments and Contingencies69
Commitments and Contingencies - Future Minimum Operating Lease Payments (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2,018 | $ 20,171 |
2,019 | 20,517 |
2,020 | 19,379 |
2,021 | 18,107 |
2,022 | 16,555 |
Thereafter | 85,978 |
Total | $ 180,707 |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation And Retirement Disclosure [Abstract] | |||
Amount of contributions in profit - sharing plan net of employee forfeitures | $ 2.2 | $ 2 | $ 2.2 |
Deferred Compensation Plans - A
Deferred Compensation Plans - Additional Information (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($)CompensationPlan | Dec. 31, 2016USD ($) | |
Postemployment Benefits [Abstract] | ||
Number of deferred compensation plan | CompensationPlan | 1 | |
Effective rate | 3.75% | |
Aggregate deferred compensation payable | $ 1,903 | $ 1,842 |
Accrued interest | $ 1,400 | $ 1,400 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Commissions paid | $ 0.8 | $ 0.9 | $ 0.9 |
John M. Engquist [Member] | Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 30.00% | ||
John M. Engquist Mother [Member] | Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 12.00% | ||
John M Engquist Sister [Member] | Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 6.00% | ||
T & J partnership [Member] | John M. Engquist [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 50.00% | ||
Lease payments | 0.2 | ||
T & J partnership [Member] | John M. Engquist Mother [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 50.00% | ||
B-C Equipment Sales Inc [Member] | John M. Engquist [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 50.00% | ||
Products and services purchased | $ 0.4 | 0.4 | 0.2 |
Sales to related party | $ 0.1 | $ 0.1 | $ 0.1 |
Summarized Quarterly Financia73
Summarized Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Financial Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 294,666 | $ 259,162 | $ 249,363 | $ 226,828 | $ 244,346 | $ 244,686 | $ 242,095 | $ 247,010 | $ 1,030,019 | $ 978,137 | $ 1,039,831 |
Income from operations | 40,268 | 47,654 | 28,668 | 21,325 | 29,874 | 33,090 | 25,371 | 22,432 | 137,915 | 110,767 | 128,243 |
Income (loss) before provision (benefit) for income taxes | 27,569 | 7,577 | 15,668 | 8,530 | 16,861 | 20,007 | 12,707 | 9,455 | 59,344 | 59,030 | 75,676 |
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | $ 109,658 | $ 37,172 | $ 44,305 |
Basic net income (loss) per common share | $ 2.41 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.09 | $ 1.05 | $ 1.26 |
Diluted net income (loss) per common share | $ 2.40 | $ 0.24 | $ 0.28 | $ 0.15 | $ 0.35 | $ 0.33 | $ 0.21 | $ 0.16 | $ 3.07 | $ 1.05 | $ 1.25 |
Summarized Quarterly Financia74
Summarized Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Financial Results of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | ||||
Merger breakup fee proceeds, net of merger costs | $ 5,800 | $ 6,500 | $ 5,782 | |
Loss on early extinguishment of debt | $ 25,400 | 25,363 | ||
One-time decrease in income tax expense related to impact from enactment | $ 66,900 | $ 66,865 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2017SegmentCustomer | Dec. 31, 2016Customer | Dec. 31, 2015Customer | |
Segment Reporting [Abstract] | |||
Number of reportable segment | Segment | 5 | ||
Sales to international customers | 0.40% | 0.40% | 0.60% |
Customer accounted for more than 10% of revenue | Customer | 0 | 0 | 0 |
Segment Information - Schedule
Segment Information - Schedule of Information about Reportable Segments (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Revenues: | |||||||||||
Revenues | $ 294,666 | $ 259,162 | $ 249,363 | $ 226,828 | $ 244,346 | $ 244,686 | $ 242,095 | $ 247,010 | $ 1,030,019 | $ 978,137 | $ 1,039,831 |
Segment Gross Profit: | |||||||||||
Total gross profit | 359,908 | 335,611 | 345,732 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 1,467,717 | 1,241,611 | 1,467,717 | 1,241,611 | |||||||
Operating Segments [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 959,903 | 912,645 | 974,621 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 359,084 | 335,437 | 344,486 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 979,828 | 947,725 | 979,828 | 947,725 | |||||||
Operating Segments [Member] | Equipment Rentals [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 479,016 | 445,227 | 443,024 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 231,855 | 211,118 | 208,985 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 904,824 | 893,816 | 904,824 | 893,816 | |||||||
Operating Segments [Member] | New Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 203,301 | 196,688 | 238,172 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 22,599 | 21,132 | 25,937 | ||||||||
Operating Segments [Member] | Used Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 107,329 | 96,910 | 118,338 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 33,197 | 30,172 | 37,000 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 58,125 | 37,912 | 58,125 | 37,912 | |||||||
Operating Segments [Member] | Parts Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 107,384 | 109,147 | 111,133 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 29,671 | 30,181 | 30,303 | ||||||||
Operating Segments [Member] | Services Revenues [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 62,873 | 64,673 | 63,954 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 41,762 | 42,834 | 42,261 | ||||||||
Operating Segments [Member] | Parts and Services [Member] | |||||||||||
Segment identified assets: | |||||||||||
Total assets | 16,879 | 15,997 | 16,879 | 15,997 | |||||||
Non-Segmented [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 70,116 | 65,492 | 65,210 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 824 | 174 | $ 1,246 | ||||||||
Segment identified assets: | |||||||||||
Total assets | $ 487,889 | $ 293,886 | $ 487,889 | $ 293,886 |
Consolidating Financial Infor77
Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Assets: | ||||
Cash | $ 165,878 | $ 7,683 | $ 7,159 | $ 15,861 |
Receivables, net | 176,081 | 140,037 | ||
Inventories, net | 75,004 | 53,909 | ||
Prepaid expenses and other assets | 9,172 | 7,513 | ||
Rental equipment, net | 904,824 | 893,816 | ||
Property and equipment, net | 101,789 | 105,492 | ||
Deferred financing costs, net | 3,772 | 1,964 | ||
Goodwill | 31,197 | 31,197 | ||
Total assets | 1,467,717 | 1,241,611 | ||
Liabilities and Stockholders’ Equity: | ||||
Amount due on senior secured credit facility | 162,642 | |||
Accounts payable | 89,781 | 39,432 | ||
Manufacturer flooring plans payable | 22,002 | 30,780 | ||
Accrued expenses payable and other liabilities | 65,095 | 56,833 | ||
Dividends payable | 150 | 67 | ||
Senior unsecured notes | 944,088 | 627,711 | ||
Capital leases payable | 1,486 | 1,704 | ||
Deferred income taxes | 126,419 | 177,835 | ||
Deferred compensation payable | 1,903 | 1,842 | ||
Total liabilities | 1,250,924 | 1,098,846 | ||
Stockholders’ equity | 216,793 | 142,765 | 142,588 | 133,367 |
Total liabilities and stockholders’ equity | 1,467,717 | 1,241,611 | ||
H & E Equipment Services [Member] | ||||
Assets: | ||||
Cash | 165,878 | 7,683 | $ 7,159 | $ 15,861 |
Receivables, net | 138,657 | 112,758 | ||
Inventories, net | 63,828 | 49,509 | ||
Prepaid expenses and other assets | 9,030 | 7,343 | ||
Rental equipment, net | 760,972 | 743,759 | ||
Property and equipment, net | 89,952 | 93,866 | ||
Deferred financing costs, net | 3,772 | 1,964 | ||
Investment in guarantor subsidiaries | 222,217 | 220,209 | ||
Goodwill | 1,671 | 1,671 | ||
Total assets | 1,455,977 | 1,238,762 | ||
Liabilities and Stockholders’ Equity: | ||||
Amount due on senior secured credit facility | 162,642 | |||
Accounts payable | 78,811 | 36,188 | ||
Manufacturer flooring plans payable | 20,300 | 30,899 | ||
Accrued expenses payable and other liabilities | 67,466 | 58,774 | ||
Dividends payable | 197 | 106 | ||
Senior unsecured notes | 944,088 | 627,711 | ||
Deferred income taxes | 126,419 | 177,835 | ||
Deferred compensation payable | 1,903 | 1,842 | ||
Total liabilities | 1,239,184 | 1,095,997 | ||
Stockholders’ equity | 216,793 | 142,765 | ||
Total liabilities and stockholders’ equity | 1,455,977 | 1,238,762 | ||
Guarantor Subsidiaries [Member] | ||||
Assets: | ||||
Receivables, net | 37,424 | 27,279 | ||
Inventories, net | 11,176 | 4,400 | ||
Prepaid expenses and other assets | 142 | 170 | ||
Rental equipment, net | 143,852 | 150,057 | ||
Property and equipment, net | 11,837 | 11,626 | ||
Goodwill | 29,526 | 29,526 | ||
Total assets | 233,957 | 223,058 | ||
Liabilities and Stockholders’ Equity: | ||||
Accounts payable | 10,970 | 3,244 | ||
Manufacturer flooring plans payable | 1,702 | (119) | ||
Accrued expenses payable and other liabilities | (2,371) | (1,941) | ||
Dividends payable | (47) | (39) | ||
Capital leases payable | 1,486 | 1,704 | ||
Total liabilities | 11,740 | 2,849 | ||
Stockholders’ equity | 222,217 | 220,209 | ||
Total liabilities and stockholders’ equity | 233,957 | 223,058 | ||
Elimination [Member] | ||||
Assets: | ||||
Investment in guarantor subsidiaries | (222,217) | (220,209) | ||
Total assets | (222,217) | (220,209) | ||
Liabilities and Stockholders’ Equity: | ||||
Stockholders’ equity | (222,217) | (220,209) | ||
Total liabilities and stockholders’ equity | $ (222,217) | $ (220,209) |
Consolidating Financial Infor78
Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | ||||||||||||
Revenues | $ 294,666 | $ 259,162 | $ 249,363 | $ 226,828 | $ 244,346 | $ 244,686 | $ 242,095 | $ 247,010 | $ 1,030,019 | $ 978,137 | $ 1,039,831 | |
Cost of revenues: | ||||||||||||
Cost of revenues | 670,111 | 642,526 | 694,099 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 359,908 | 335,611 | 345,732 | |||||||||
Selling, general and administrative expenses | 232,784 | 228,129 | 220,226 | |||||||||
Merger breakup fee proceeds, net of merger costs | 5,800 | 6,500 | 5,782 | |||||||||
Gain from sales of property and equipment, net | 5,009 | 3,285 | 2,737 | |||||||||
Income from operations | 40,268 | 47,654 | 28,668 | 21,325 | 29,874 | 33,090 | 25,371 | 22,432 | 137,915 | 110,767 | 128,243 | |
Other income (expense): | ||||||||||||
Interest expense | (54,958) | (53,604) | (54,030) | |||||||||
Loss on early extinguishment of debt | $ (25,400) | (25,363) | ||||||||||
Other, net | 1,750 | 1,867 | 1,463 | |||||||||
Total other expense, net | (78,571) | (51,737) | (52,567) | |||||||||
Income before provision (benefit) for income taxes | 27,569 | 7,577 | 15,668 | 8,530 | 16,861 | 20,007 | 12,707 | 9,455 | 59,344 | 59,030 | 75,676 | |
Provision (Benefit) for income taxes | (50,314) | 21,858 | 31,371 | |||||||||
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | 109,658 | 37,172 | 44,305 | |
Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 169,455 | 162,415 | 162,089 | |||||||||
Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,706 | 71,694 | 71,950 | |||||||||
Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 959,903 | 912,645 | 974,621 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 359,084 | 335,437 | 344,486 | |||||||||
Other [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 70,116 | 65,492 | 65,210 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 69,292 | 65,318 | 63,964 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 824 | 174 | 1,246 | |||||||||
Elimination [Member] | ||||||||||||
Gross profit (loss): | ||||||||||||
Equity in earnings of guarantor subsidiaries | (16,136) | (11,416) | (8,428) | |||||||||
Income from operations | (16,136) | (11,416) | (8,428) | |||||||||
Other income (expense): | ||||||||||||
Income before provision (benefit) for income taxes | (16,136) | (11,416) | (8,428) | |||||||||
Net income | (16,136) | (11,416) | (8,428) | |||||||||
H & E Equipment Services [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 849,031 | 805,673 | 880,027 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 554,252 | 530,593 | 592,803 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 294,779 | 275,080 | 287,224 | |||||||||
Selling, general and administrative expenses | 190,392 | 187,369 | 183,235 | |||||||||
Equity in earnings of guarantor subsidiaries | 16,136 | 11,416 | 8,428 | |||||||||
Merger breakup fee proceeds, net of merger costs | 5,782 | |||||||||||
Gain from sales of property and equipment, net | 2,435 | 2,789 | 2,255 | |||||||||
Income from operations | 128,740 | 101,916 | 114,672 | |||||||||
Other income (expense): | ||||||||||||
Interest expense | (45,480) | (44,503) | (40,303) | |||||||||
Loss on early extinguishment of debt | (25,363) | |||||||||||
Other, net | 1,447 | 1,617 | 1,307 | |||||||||
Total other expense, net | (69,396) | (42,886) | (38,996) | |||||||||
Income before provision (benefit) for income taxes | 59,344 | 59,030 | 75,676 | |||||||||
Provision (Benefit) for income taxes | (50,314) | 21,858 | 31,371 | |||||||||
Net income | 109,658 | 37,172 | 44,305 | |||||||||
H & E Equipment Services [Member] | Other [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 57,405 | 53,276 | 53,051 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 56,696 | 52,861 | 51,763 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 709 | 415 | 1,288 | |||||||||
Guarantor Subsidiaries [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 180,988 | 172,464 | 159,804 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 115,859 | 111,933 | 101,296 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 65,129 | 60,531 | 58,508 | |||||||||
Selling, general and administrative expenses | 42,392 | 40,760 | 36,991 | |||||||||
Gain from sales of property and equipment, net | 2,574 | 496 | 482 | |||||||||
Income from operations | 25,311 | 20,267 | 21,999 | |||||||||
Other income (expense): | ||||||||||||
Interest expense | (9,478) | (9,101) | (13,727) | |||||||||
Other, net | 303 | 250 | 156 | |||||||||
Total other expense, net | (9,175) | (8,851) | (13,571) | |||||||||
Income before provision (benefit) for income taxes | 16,136 | 11,416 | 8,428 | |||||||||
Net income | 16,136 | 11,416 | 8,428 | |||||||||
Guarantor Subsidiaries [Member] | Other [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 12,711 | 12,216 | 12,159 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 12,596 | 12,457 | 12,201 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 115 | (241) | (42) | |||||||||
Equipment Rentals [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 479,016 | 445,227 | 443,024 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 231,855 | 211,118 | 208,985 | |||||||||
Equipment Rentals [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 169,455 | 162,415 | 162,089 | |||||||||
Equipment Rentals [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,706 | 71,694 | 71,950 | |||||||||
Equipment Rentals [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 395,275 | 364,654 | 366,160 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 190,188 | 170,907 | 171,265 | |||||||||
Equipment Rentals [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 140,489 | 134,484 | 135,511 | |||||||||
Equipment Rentals [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 64,598 | 59,263 | 59,384 | |||||||||
Equipment Rentals [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 83,741 | 80,573 | 76,864 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 41,667 | 40,211 | 37,720 | |||||||||
Equipment Rentals [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 28,966 | 27,931 | 26,578 | |||||||||
Equipment Rentals [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 13,108 | 12,431 | 12,566 | |||||||||
New Equipment Sales [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 203,301 | 196,688 | 238,172 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 180,702 | 175,556 | 212,235 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 22,599 | 21,132 | 25,937 | |||||||||
New Equipment Sales [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 166,730 | 158,291 | 213,476 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 148,163 | 140,948 | 190,013 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 18,567 | 17,343 | 23,463 | |||||||||
New Equipment Sales [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 36,571 | 38,397 | 24,696 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 32,539 | 34,608 | 22,222 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 4,032 | 3,789 | 2,474 | |||||||||
Used Equipment Sales [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 107,329 | 96,910 | 118,338 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 74,132 | 66,738 | 81,338 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 33,197 | 30,172 | 37,000 | |||||||||
Used Equipment Sales [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 84,741 | 78,956 | 96,114 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 59,481 | 55,075 | 66,888 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 25,260 | 23,881 | 29,226 | |||||||||
Used Equipment Sales [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 22,588 | 17,954 | 22,224 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 14,651 | 11,663 | 14,450 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 7,937 | 6,291 | 7,774 | |||||||||
Parts Sales [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 107,384 | 109,147 | 111,133 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 77,713 | 78,966 | 80,830 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 29,671 | 30,181 | 30,303 | |||||||||
Parts Sales [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 92,073 | 95,105 | 96,743 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 66,974 | 68,999 | 70,555 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 25,099 | 26,106 | 26,188 | |||||||||
Parts Sales [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 15,311 | 14,042 | 14,390 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 10,739 | 9,967 | 10,275 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 4,572 | 4,075 | 4,115 | |||||||||
Services Revenues [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 62,873 | 64,673 | 63,954 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 21,111 | 21,839 | 21,693 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 41,762 | 42,834 | 42,261 | |||||||||
Services Revenues [Member] | H & E Equipment Services [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 52,807 | 55,391 | 54,483 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 17,851 | 18,963 | 18,689 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | 34,956 | 36,428 | 35,794 | |||||||||
Services Revenues [Member] | Guarantor Subsidiaries [Member] | Operating Segments [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 10,066 | 9,282 | 9,471 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 3,260 | 2,876 | 3,004 | |||||||||
Gross profit (loss): | ||||||||||||
Gross profit (loss) | $ 6,806 | $ 6,406 | $ 6,467 |
Consolidating Financial Infor79
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 | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities: | ||||||||||||
Net income | $ 85,928 | $ 8,462 | $ 9,878 | $ 5,390 | $ 12,430 | $ 11,665 | $ 7,503 | $ 5,574 | $ 109,658 | $ 37,172 | $ 44,305 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization on property and equipment | 23,790 | 27,282 | 24,368 | |||||||||
Depreciation on rental equipment | 169,455 | 162,415 | 162,089 | |||||||||
Amortization of deferred financing costs | 1,046 | 1,052 | 1,036 | |||||||||
Accretion of note discount, net of premium amortization | 274 | 168 | 168 | |||||||||
Provision for losses on accounts receivable | 3,932 | 3,137 | 3,441 | |||||||||
Provision for inventory obsolescence | 161 | 127 | 295 | |||||||||
Change in deferred income taxes | (50,535) | 21,578 | 30,651 | |||||||||
Stock-based compensation expense | 3,526 | 3,037 | 2,655 | |||||||||
Loss on early extinguishment of debt | $ 25,400 | 25,363 | ||||||||||
Gain from sales of property and equipment, net | (5,009) | (3,285) | (2,737) | |||||||||
Gain from sales of rental equipment, net | (31,882) | (29,003) | (35,134) | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivables | (40,012) | 4,154 | 13,566 | |||||||||
Inventories | (31,771) | 4,267 | (14,517) | |||||||||
Prepaid expenses and other assets | (1,659) | 2,541 | (908) | |||||||||
Accounts payable | 50,349 | (27,345) | 13,436 | |||||||||
Manufacturer flooring plans payable | (8,778) | (31,653) | (31,167) | |||||||||
Accrued expenses payable and other liabilities | 8,230 | 1,667 | (4,995) | |||||||||
Deferred compensation payable | 61 | (332) | 68 | |||||||||
Net cash provided by operating activities | 226,199 | 176,979 | 206,620 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (22,515) | (22,895) | (26,797) | |||||||||
Purchases of rental equipment | (234,209) | (179,709) | (178,772) | |||||||||
Proceeds from sales of property and equipment | 7,506 | 3,805 | 4,289 | |||||||||
Proceeds from sales of rental equipment | 96,143 | 84,389 | 99,521 | |||||||||
Net cash used in investing activities | (153,075) | (114,410) | (101,759) | |||||||||
Cash flows from financing activities: | ||||||||||||
Purchases of treasury stock | (783) | (561) | (470) | |||||||||
Borrowings on senior secured credit facility | 1,193,544 | 966,146 | 982,961 | |||||||||
Payments on senior secured credit facility | (1,356,186) | (988,361) | (1,058,023) | |||||||||
Dividends paid | (39,172) | (39,066) | (37,114) | |||||||||
Principal payments on senior unsecured notes due 2022 | (630,000) | |||||||||||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336) | |||||||||||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500 | |||||||||||
Payments of deferred financing costs | (17,278) | (725) | ||||||||||
Payments of capital lease obligations | (218) | (203) | (192) | |||||||||
Net cash provided by (used in) financing activities | 85,071 | (62,045) | (113,563) | |||||||||
Net increase (decrease) in cash | 158,195 | 524 | (8,702) | |||||||||
Cash, beginning of year | 7,683 | 7,159 | 7,683 | 7,159 | 15,861 | |||||||
Cash, end of year | 165,878 | 7,683 | 165,878 | 165,878 | 7,683 | 7,159 | ||||||
H & E Equipment Services [Member] | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | 109,658 | 37,172 | 44,305 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization on property and equipment | 20,742 | 24,194 | 21,443 | |||||||||
Depreciation on rental equipment | 140,489 | 134,484 | 135,511 | |||||||||
Amortization of deferred financing costs | 1,046 | 1,052 | 1,036 | |||||||||
Accretion of note discount, net of premium amortization | 274 | 168 | 168 | |||||||||
Provision for losses on accounts receivable | 3,148 | 2,616 | 3,223 | |||||||||
Provision for inventory obsolescence | 161 | 127 | 295 | |||||||||
Change in deferred income taxes | (50,535) | 21,578 | 30,651 | |||||||||
Stock-based compensation expense | 3,526 | 3,037 | 2,655 | |||||||||
Loss on early extinguishment of debt | 25,363 | |||||||||||
Gain from sales of property and equipment, net | (2,435) | (2,789) | (2,255) | |||||||||
Gain from sales of rental equipment, net | (24,063) | (22,780) | (27,732) | |||||||||
Equity in earnings of guarantor subsidiaries | (16,136) | (11,416) | (8,428) | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivables | (29,083) | 8,783 | 9,817 | |||||||||
Inventories | (23,221) | 5,785 | (12,168) | |||||||||
Prepaid expenses and other assets | (1,687) | 2,566 | (882) | |||||||||
Accounts payable | 42,623 | (27,771) | 13,298 | |||||||||
Manufacturer flooring plans payable | (10,599) | (31,534) | (31,167) | |||||||||
Accrued expenses payable and other liabilities | 8,660 | 2,263 | (4,604) | |||||||||
Deferred compensation payable | 61 | (332) | 68 | |||||||||
Net cash provided by operating activities | 197,992 | 147,203 | 175,234 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (17,852) | (19,505) | (23,989) | |||||||||
Purchases of rental equipment | (198,988) | (138,562) | (143,840) | |||||||||
Proceeds from sales of property and equipment | 3,528 | 3,190 | 3,738 | |||||||||
Proceeds from sales of rental equipment | 74,090 | 67,282 | 80,093 | |||||||||
Investment in subsidiaries | 14,128 | 2,749 | 13,426 | |||||||||
Net cash used in investing activities | (125,094) | (84,846) | (70,572) | |||||||||
Cash flows from financing activities: | ||||||||||||
Purchases of treasury stock | (783) | (561) | (470) | |||||||||
Borrowings on senior secured credit facility | 1,193,544 | 966,146 | 982,961 | |||||||||
Payments on senior secured credit facility | (1,356,186) | (988,361) | (1,058,023) | |||||||||
Dividends paid | (39,164) | (39,057) | (37,107) | |||||||||
Principal payments on senior unsecured notes due 2022 | (630,000) | |||||||||||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336) | |||||||||||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500 | |||||||||||
Payments of deferred financing costs | (17,278) | (725) | ||||||||||
Net cash provided by (used in) financing activities | 85,297 | (61,833) | (113,364) | |||||||||
Net increase (decrease) in cash | 158,195 | 524 | (8,702) | |||||||||
Cash, beginning of year | $ 7,683 | $ 7,159 | 7,683 | 7,159 | 15,861 | |||||||
Cash, end of year | $ 165,878 | $ 7,683 | $ 165,878 | 165,878 | 7,683 | 7,159 | ||||||
Guarantor Subsidiaries [Member] | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | 16,136 | 11,416 | 8,428 | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization on property and equipment | 3,048 | 3,088 | 2,925 | |||||||||
Depreciation on rental equipment | 28,966 | 27,931 | 26,578 | |||||||||
Provision for losses on accounts receivable | 784 | 521 | 218 | |||||||||
Gain from sales of property and equipment, net | (2,574) | (496) | (482) | |||||||||
Gain from sales of rental equipment, net | (7,819) | (6,223) | (7,402) | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Receivables | (10,929) | (4,629) | 3,749 | |||||||||
Inventories | (8,550) | (1,518) | (2,349) | |||||||||
Prepaid expenses and other assets | 28 | (25) | (26) | |||||||||
Accounts payable | 7,726 | 426 | 138 | |||||||||
Manufacturer flooring plans payable | 1,821 | (119) | ||||||||||
Accrued expenses payable and other liabilities | (430) | (596) | (391) | |||||||||
Net cash provided by operating activities | 28,207 | 29,776 | 31,386 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchases of property and equipment | (4,663) | (3,390) | (2,808) | |||||||||
Purchases of rental equipment | (35,221) | (41,147) | (34,932) | |||||||||
Proceeds from sales of property and equipment | 3,978 | 615 | 551 | |||||||||
Proceeds from sales of rental equipment | 22,053 | 17,107 | 19,428 | |||||||||
Net cash used in investing activities | (13,853) | (26,815) | (17,761) | |||||||||
Cash flows from financing activities: | ||||||||||||
Dividends paid | (8) | (9) | (7) | |||||||||
Payments of capital lease obligations | (218) | (203) | (192) | |||||||||
Capital contributions | (14,128) | (2,749) | (13,426) | |||||||||
Net cash provided by (used in) financing activities | (14,354) | (2,961) | (13,625) | |||||||||
Elimination [Member] | ||||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | (16,136) | (11,416) | (8,428) | |||||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in earnings of guarantor subsidiaries | 16,136 | 11,416 | 8,428 | |||||||||
Cash flows from investing activities: | ||||||||||||
Investment in subsidiaries | (14,128) | (2,749) | (13,426) | |||||||||
Net cash used in investing activities | (14,128) | (2,749) | (13,426) | |||||||||
Cash flows from financing activities: | ||||||||||||
Capital contributions | 14,128 | 2,749 | 13,426 | |||||||||
Net cash provided by (used in) financing activities | $ 14,128 | $ 2,749 | $ 13,426 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 4,669 | $ 5,663 | $ 3,935 |
Additions Charged to Costs and Expenses | 4,093 | 3,264 | 3,736 |
Deductions | (4,042) | (4,258) | (2,008) |
Balance at End of Year | 4,720 | 4,669 | 5,663 |
Allowance for doubtful accounts receivable [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 3,769 | 4,729 | 3,288 |
Additions Charged to Costs and Expenses | 3,932 | 3,137 | 3,441 |
Deductions | (3,928) | (4,097) | (2,000) |
Balance at End of Year | 3,773 | 3,769 | 4,729 |
Allowance for inventory obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 900 | 934 | 647 |
Additions Charged to Costs and Expenses | 161 | 127 | 295 |
Deductions | (114) | (161) | (8) |
Balance at End of Year | $ 947 | $ 900 | $ 934 |