Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 18, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | HEES | ||
Entity Registrant Name | H&E EQUIPMENT SERVICES, INC. | ||
Entity Central Index Key | 0001339605 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 35,870,082 | ||
Entity Public Float | $ 1,040,727,942 | ||
Entity File Number | 000-51759 | ||
Entity Tax Identification Number | 81-0553291 | ||
Entity Address, Address Line One | 7500 Pecue Lane | ||
Entity Address, City or Town | Baton Rouge | ||
Entity Address, State or Province | LA | ||
Entity Address, Postal Zip Code | 70809 | ||
City Area Code | 225 | ||
Local Phone Number | 298-5200 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Security Exchange Name | NASDAQ | ||
Title of 12(b) Security | Common Stock, par value $0.01 per share | ||
Entity Incorporation, State or Country Code | DE | ||
Documents Incorporated by Reference | Portions of the document listed below have been incorporated by reference into the indicated parts of this Form 10-K, as specified in the responses to the item numbers involved. Part III The registrant’s definitive proxy statement, for use in connection with the Annual Meeting of Stockholders, to be filed within 120 days after the registrant’s fiscal year ended December 31, 2019. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Cash | $ 14,247 | $ 16,677 |
Receivables, net of allowance for doubtful accounts of $5,236 and $4,094, respectively | 192,204 | 201,556 |
Inventories, net of reserves for obsolescence of $331 and $368, respectively | 85,478 | 104,598 |
Prepaid expenses and other assets | 10,262 | 10,508 |
Rental equipment, net of accumulated depreciation of $676,376 and $582,520, respectively | 1,217,673 | 1,141,498 |
Property and equipment, net of accumulated depreciation and amortization of $156,782 and $142,662, respectively | 130,564 | 115,121 |
Operating lease right-of-use assets, net of accumulated amortization of $11,197 | 156,570 | |
Finance lease right-of-use assets, net of accumulated amortization of $2,051 | 365 | |
Deferred financing costs, net of accumulated amortization of $14,419 and $13,717, respectively | 2,857 | 3,000 |
Intangible assets, net of accumulated amortization of $6,952 and $3,320, respectively | 32,948 | 28,380 |
Goodwill | 131,442 | 105,843 |
Total assets | 1,974,610 | 1,727,181 |
Liabilities: | ||
Amounts due on senior secured credit facility | 216,879 | 170,761 |
Accounts payable | 58,853 | 101,840 |
Manufacturer flooring plans payable | 25,201 | 23,666 |
Accrued expenses payable and other liabilities | 78,382 | 73,371 |
Dividends payable | 171 | 132 |
Senior unsecured notes, net of unaccreted discount of $2,691 and $3,168 and deferred financing costs of $1,743 and $2,052, respectively | 945,566 | 944,780 |
Operating lease right-of-use liabilities | 159,265 | |
Finance lease right-of-use liabilities | 550 | |
Capital leases payable | 726 | |
Deferred income taxes | 180,126 | 153,113 |
Deferred compensation payable | 2,098 | 1,989 |
Total liabilities | 1,667,091 | 1,470,378 |
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; 39,921,838 and 39,748,562 shares issued at December 31, 2019 and 2018, respectively, and 35,848,089 and 35,733,569 shares outstanding at December 31, 2019 and 2018, respectively | 398 | 396 |
Additional paid-in capital | 235,844 | 231,174 |
Treasury stock at cost, 4,073,749 and 4,014,993 shares of common stock held at December 31, 2019 and 2018, respectively | (64,783) | (63,099) |
Retained earnings | 136,060 | 88,332 |
Total stockholders’ equity | 307,519 | 256,803 |
Total liabilities and stockholders’ equity | $ 1,974,610 | $ 1,727,181 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful accounts receivables | $ 5,236 | $ 4,094 |
Reserves for obsolescence inventories | 331 | 368 |
Accumulated depreciation, rental equipment | 676,376 | 582,520 |
Accumulated depreciation and amortization, property and equipment | 156,782 | 142,662 |
Accumulated amortization, operating lease right-of-use assets | 11,197 | |
Accumulated amortization, financing lease right-of-use assets | 2,051 | |
Accumulated amortization, deferred financing costs | 14,419 | 13,717 |
Accumulated amortization, intangible assets | 6,952 | 3,320 |
Unaccreted discount, net | 2,691 | 3,168 |
Deferred financing costs | $ 1,743 | $ 2,052 |
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 | 39,921,838 | 39,748,562 |
Common stock, shares outstanding | 35,848,089 | 35,733,569 |
Treasury stock, shares | 4,073,749 | 4,014,993 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | Oct. 01, 2019 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Revenues: | ||||||||||||
Revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 | |
Cost of revenues: | ||||||||||||
Cost of revenues | 849,195 | 800,427 | 670,111 | |||||||||
Gross profit | 499,170 | 438,534 | 359,908 | |||||||||
Selling, general and administrative expenses | 311,026 | 278,298 | 232,784 | |||||||||
Impairment of goodwill | 12,200 | 12,184 | ||||||||||
Merger costs (net of merger breakup fee proceeds) | 416 | 708 | (5,782) | |||||||||
Gain from sales of property and equipment, net | 4,617 | 7,118 | 5,009 | |||||||||
Income from operations | 41,310 | 55,503 | 47,673 | 35,675 | 50,899 | 45,318 | 43,103 | 27,326 | 180,161 | 166,646 | 137,915 | |
Other income (expense): | ||||||||||||
Interest expense | (68,277) | (63,707) | (54,958) | |||||||||
Loss on early extinguishment of debt | (25,363) | |||||||||||
Other, net | 3,977 | 1,724 | 1,750 | |||||||||
Total other expense, net | (64,300) | (61,983) | (78,571) | |||||||||
Income before provision (benefit) for income taxes | 26,854 | 38,760 | 30,895 | 19,352 | 34,755 | 28,971 | 27,869 | 13,068 | 115,861 | 104,663 | 59,344 | |
Provision (benefit) for income taxes | 28,650 | 28,040 | (50,314) | |||||||||
Net income | $ 21,923 | $ 28,431 | $ 22,614 | $ 14,243 | $ 25,060 | $ 21,314 | $ 20,771 | $ 9,478 | $ 87,211 | $ 76,623 | $ 109,658 | |
Net income per common share: | ||||||||||||
Basic | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.60 | $ 0.58 | $ 0.27 | $ 2.43 | $ 2.15 | $ 3.09 | |
Diluted | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.59 | $ 0.58 | $ 0.26 | $ 2.42 | $ 2.13 | $ 3.07 | |
Weighted average common shares outstanding: | ||||||||||||
Basic | 35,859 | 35,677 | 35,516 | |||||||||
Diluted | 36,033 | 35,903 | 35,699 | |||||||||
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.10 | |||||||||
Equipment Rentals [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | $ 766,354 | $ 627,181 | $ 508,121 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 419,472 | 353,422 | 294,599 | |||||||||
Gross profit | 346,882 | 273,759 | 213,522 | |||||||||
Equipment Rentals [Member] | Rentals Other [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 70,613 | 55,449 | 47,438 | |||||||||
Equipment Rentals [Member] | Rental Depreciation [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 243,780 | 208,453 | 169,455 | |||||||||
Equipment Rentals [Member] | Rental Expense [Member] | ||||||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 105,079 | 89,520 | 77,706 | |||||||||
Equipment Rentals [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 766,354 | 627,181 | 508,121 | |||||||||
New Equipment Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 239,091 | 262,948 | 203,301 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 211,372 | 232,057 | 180,702 | |||||||||
Impairment of goodwill | $ 10,700 | 10,700 | ||||||||||
Used Equipment Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 139,349 | 125,125 | 107,329 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 92,021 | 86,052 | 74,132 | |||||||||
Parts Sales [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 123,855 | 120,454 | 114,253 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 90,963 | 88,263 | 83,135 | |||||||||
Services Revenues [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 67,941 | 63,488 | 62,873 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | 21,946 | 21,328 | 21,111 | |||||||||
Other [Member] | ||||||||||||
Revenues: | ||||||||||||
Revenues | 11,775 | 39,765 | 34,142 | |||||||||
Cost of revenues: | ||||||||||||
Cost of revenues | $ 13,421 | $ 19,305 | $ 16,432 |
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, 2016 | $ 142,765 | $ 394 | $ 223,544 | $ (60,966) | $ (20,207) |
Beginning balances, shares at Dec. 31, 2016 | 39,496,759 | ||||
Cumulative effect adjustment for previously unrecognized excess tax benefits pursuant to the adoption of ASU 2016-09 | 881 | 881 | |||
Stock-based compensation | 3,526 | 3,526 | |||
Cash dividends declared on common stock ($1.10 per share in 2017, $1.10 per share in 2018 and $1.10 per share in 2019) | (39,255) | (39,255) | |||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures | 1 | $ 1 | |||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures, shares | 127,014 | ||||
Repurchases of 37,565, 37,805 and 58,756 shares of restricted common stock in 31 December 2017, 2018 and 2019 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 | ||||
Stock-based compensation | 4,214 | 4,214 | |||
Cash dividends declared on common stock ($1.10 per share in 2017, $1.10 per share in 2018 and $1.10 per share in 2019) | (39,368) | (39,368) | |||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures | (109) | $ 1 | (110) | ||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures, shares | 124,789 | ||||
Repurchases of 37,565, 37,805 and 58,756 shares of restricted common stock in 31 December 2017, 2018 and 2019 respectively | (1,350) | (1,350) | |||
Net income | 76,623 | 76,623 | |||
Ending Balance at Dec. 31, 2018 | $ 256,803 | $ 396 | 231,174 | (63,099) | 88,332 |
Balance, Shares at Dec. 31, 2018 | 39,748,562 | 39,748,562 | |||
Cumulative Effect of New Accounting Principle in Period of Adoption | Adoption of Topic 842 | $ (56) | (56) | |||
Stock-based compensation | 4,670 | 4,670 | |||
Cash dividends declared on common stock ($1.10 per share in 2017, $1.10 per share in 2018 and $1.10 per share in 2019) | (39,427) | (39,427) | |||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures | 2 | $ 2 | |||
Issuances of non-vested restricted common stock, net of restricted stock forfeitures, shares | 173,276 | ||||
Repurchases of 37,565, 37,805 and 58,756 shares of restricted common stock in 31 December 2017, 2018 and 2019 respectively | (1,684) | (1,684) | |||
Net income | 87,211 | 87,211 | |||
Ending Balance at Dec. 31, 2019 | $ 307,519 | $ 398 | $ 235,844 | $ (64,783) | $ 136,060 |
Balance, Shares at Dec. 31, 2019 | 39,921,838 | 39,921,838 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.10 |
Repurchase of restricted common stock, shares | 58,756 | 37,805 | 37,565 |
Retained Earnings (Accumulated Deficit) [Member] | |||
Dividends declared per common share outstanding | $ 1.10 | $ 1.10 | $ 1.10 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | |||
Net income | $ 87,211,000 | $ 76,623,000 | $ 109,658,000 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization of property and equipment | 28,425,000 | 24,593,000 | 23,790,000 |
Depreciation of rental equipment | 243,780,000 | 208,453,000 | 169,455,000 |
Amortization of intangible assets | 4,132,000 | 3,320,000 | 0 |
Amortization of deferred financing costs | 1,010,000 | 1,083,000 | 1,046,000 |
Accretion of note discount, net of premium amortization | 477,000 | 477,000 | 274,000 |
Non-cash operating lease expense | 11,680,000 | ||
Amortization of finance lease right-of-use assets | 163,000 | ||
Provision for losses on accounts receivable | 5,793,000 | 2,741,000 | 3,932,000 |
Provision for inventory obsolescence | 152,000 | 122,000 | 161,000 |
Deferred income taxes | 27,013,000 | 26,695,000 | (50,535,000) |
Stock-based compensation expense | 4,670,000 | 4,214,000 | 3,526,000 |
Impairment of goodwill | 12,184,000 | ||
Loss on early extinguishment of debt | 25,363,000 | ||
Gain from sales of property and equipment, net | (4,617,000) | (7,118,000) | (5,009,000) |
Gain from sales of rental equipment, net | (46,613,000) | (38,352,000) | (31,882,000) |
Changes in operating assets and liabilities, net of acquisitions: | |||
Receivables | 9,222,000 | (17,761,000) | (40,012,000) |
Inventories | (19,637,000) | (48,230,000) | (31,771,000) |
Prepaid expenses and other assets | 267,000 | (965,000) | (1,659,000) |
Accounts payable | (43,358,000) | 6,994,000 | 50,349,000 |
Manufacturer flooring plans payable | 1,535,000 | 1,664,000 | (8,778,000) |
Accrued expenses payable and other liabilities | (4,380,000) | 2,572,000 | 8,230,000 |
Deferred compensation payable | 109,000 | 86,000 | 61,000 |
Net cash provided by operating activities | 319,218,000 | 247,211,000 | 226,199,000 |
Cash flows from investing activities: | |||
Acquisition of businesses, net of cash acquired | (106,746,000) | (196,027,000) | |
Purchases of property and equipment | (43,111,000) | (34,960,000) | (22,515,000) |
Purchases of rental equipment | (309,654,000) | (416,600,000) | (234,209,000) |
Proceeds from sales of property and equipment | 6,050,000 | 9,261,000 | 7,506,000 |
Proceeds from sales of rental equipment | 127,558,000 | 112,086,000 | 96,143,000 |
Net cash used in investing activities | (325,903,000) | (526,240,000) | (153,075,000) |
Cash flows from financing activities: | |||
Purchases of treasury stock | (1,684,000) | (1,350,000) | (783,000) |
Borrowings on senior secured credit facility | 1,457,744,000 | 1,436,849,000 | 1,193,544,000 |
Payments on senior secured credit facility | (1,411,626,000) | (1,266,088,000) | (1,356,186,000) |
Principal payments on senior unsecured notes due 2022 | (630,000,000) | ||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336,000) | ||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500,000 | ||
Payments of deferred financing costs | (559,000) | (97,000) | (17,278,000) |
Dividends paid | (39,388,000) | (39,274,000) | (39,172,000) |
Payments of finance lease obligations | (232,000) | ||
Payments of capital lease obligations | (212,000) | (218,000) | |
Net cash provided by financing activities | 4,255,000 | 129,828,000 | 85,071,000 |
Net increase (decrease) in cash | (2,430,000) | (149,201,000) | 158,195,000 |
Cash, beginning of year | 16,677,000 | 165,878,000 | 7,683,000 |
Cash, end of year | 14,247,000 | 16,677,000 | 165,878,000 |
Supplemental schedule of non-cash investing and financing activities: | |||
Accrued acquisition purchase price consideration | 3,432,000 | 3,432,000 | |
Non-cash asset purchases: | |||
Assets transferred from new and used inventory to rental fleet | 39,478,000 | 24,341,000 | 10,515,000 |
Purchases of property and equipment included in accrued expenses payable and other liabilities | 468,000 | (473,000) | (23,000) |
Operating lease right-of-use assets and lease liabilities recorded upon adoption of ASC 842 | 162,814,000 | ||
Finance lease right-of-use assets and lease liabilities recorded upon adoption of ASC 842 | 782,000 | ||
Operating lease assets obtained in exchange for new operating lease liabilities | 7,094,000 | ||
Cash paid during the year for: | |||
Interest | 66,608,000 | 62,424,000 | 49,546,000 |
Income taxes paid (refunds received), net | $ 996,000 | $ 2,366,000 | $ 478,000 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | (1) 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, 2019 | |
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. Reclassifications and Comparability Prior period hauling revenues and related cost of revenues have been reclassified to conform to the current periods’ presentation. The tables below (amounts in thousands) reconcile for the years ended December 31, 2018 and 2017, our Revenues, Cost of Revenues and Gross Profit as previously reported to the current period presentation in this Annual Report on Form 10-K. Year Ended December 31, 2018 2017 As Previously Reported Reclassification of Hauling Fees As Currently Reported As Previously Reported Reclassification of Hauling Fees As Currently Reported Revenues: Equipment rentals $ 592,193 $ 34,988 $ 627,181 $ 479,016 $ 29,105 $ 508,121 New equipment sales 262,948 — 262,948 203,301 — 203,301 Used equipment sales 125,125 — 125,125 107,329 — 107,329 Parts sales 120,454 — 120,454 114,253 — 114,253 Services revenues 63,488 — 63,488 62,873 — 62,873 Other 74,753 (34,988 ) 39,765 63,247 (29,105 ) 34,142 Total revenues 1,238,961 — 1,238,961 1,030,019 — 1,030,019 Cost of revenues: Rental depreciation 208,453 — 208,453 169,455 — 169,455 Rental expense 89,520 — 89,520 77,706 — 77,706 Rental other — 55,449 55,449 — 47,438 47,438 297,973 55,449 353,422 247,161 47,438 294,599 New equipment sales 232,057 — 232,057 180,702 — 180,702 Used equipment sales 86,052 — 86,052 74,132 — 74,132 Parts sales 88,263 — 88,263 83,135 — 83,135 Services revenues 21,328 — 21,328 21,111 — 21,111 Other 74,754 (55,449 ) 19,305 63,870 (47,438 ) 16,432 Total cost of revenues 800,427 — 800,427 670,111 — 670,111 Gross profit $ 438,534 $ — $ 438,534 $ 359,908 $ — $ 359,908 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 Under Topic 606, Revenue from Contracts with Customers Leases, Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. Nature of goods and services The tables below summarize our revenues as presented in our consolidated statements of income for the years ended December 31, 2019, 2018 and 2017 by revenue type and by the applicable accounting standard (amounts in thousands). Year Ended December 31, 2019 Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 668,087 $ 1,118 $ 669,205 Re-rent revenue 25,342 — 25,342 Ancillary and other rental revenues: Delivery and pick-up — 40,049 40,049 Other 31,758 — 31,758 Total ancillary rental revenues 31,758 40,049 71,807 Total equipment rental revenues 725,187 41,167 766,354 New equipment sales — 239,091 239,091 Used equipment sales — 139,349 139,349 Parts sales — 123,855 123,855 Services revenues — 67,941 67,941 Other — 11,775 11,775 Total revenues $ 725,187 $ 623,178 $ 1,348,365 Year Ended December 31, 2018 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 568,412 $ 1,334 $ 569,746 Re-rent revenue 22,447 — 22,447 Ancillary and other rental revenues: Delivery and pick-up — 34,988 34,988 Other — — — Total ancillary rental revenues — 34,988 34,988 Total equipment rental revenues 590,859 36,322 627,181 New equipment sales — 262,948 262,948 Used equipment sales — 125,125 125,125 Parts sales — 120,454 120,454 Services revenues — 63,488 63,488 Other 21,693 18,072 39,765 Total revenues $ 612,552 $ 626,409 $ 1,238,961 Year Ended December 31, 2017 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 459,571 $ 2,038 $ 461,609 Re-rent revenue 17,407 — 17,407 Ancillary and other rental revenues: Delivery and pick-up — 29,105 29,105 Other — — — Total ancillary rental revenues — 29,105 29,105 Total equipment rental revenues 476,978 31,143 508,121 New equipment sales — 203,301 203,301 Used equipment sales — 107,329 107,329 Parts sales — 114,253 114,253 Services revenues — 62,873 62,873 Other 17,791 16,351 34,142 Total revenues $ 494,769 $ 535,250 $ 1,030,019 (1) Prior to our adoption of Topic 842 on January 1, 2019, l eases were accounted for under Topic 840. See additional information below in Recently Adopted Accounting Pronouncements. Revenues by reporting segment are presented in note 18 of our condensed consolidated financial statements, using the revenue captions reflected in our consolidated statements of income. We believe that the disaggregation of our revenues from contracts to customers as reflected above, coupled with further discussion below and the reporting segment in note 18, depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. Lease revenues Topic 842 Owned Equipment Rentals: Owned equipment rentals represent revenues from renting equipment. We account for these rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. Other equipment rental revenue : Other equipment rental revenue is primarily comprised of (i) revenue from customers who purchase insurance to protect against potential damages or loss the equipment they rent, (ii) environmental charges associated with the rental of equipment, and (iii) fuel recovery fees charged to customers. Fuel consumption charges are recognized upon return of the rental equipment when fuel consumption by the customer, if any, can be measured. Income from environmental fees and damage waiver insurance policies are recognized when earned over the period the equipment is rented. Topic 840 Rental Revenues: Owned equipment rentals represent revenues from renting equipment. We account for these rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. Other: Other rental revenues primarily represent services performed by us in connection with the rental of equipment to a customer, such as fuel consumption charges, environmental fees and damage waiver insurance. Fuel consumption charges are recognized upon return of the rental equipment when fuel consumption by the customer, if any, can be measured. Income from environmental fees and damage waiver insurance policies are recognized when earned over the period the equipment is rented . Revenues from contracts with customers (Topic 606) The accounting for the types of revenues accounted for pursuant to Topic 606 are discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Rental revenues: An insignificant portion of our total equipment rental revenues are recognized pursuant to Topic 606 rather than pursuant to Topic 842. These revenues represent services performed by us in connection with the rental of equipment and are comprised of customer training fees on rented equipment and erection and dismantling services on rental equipment. Revenues for these services are recognized upon completion of such services. See discussion above regarding rental revenues recognized pursuant to Topic 842. Delivery and pick-up : Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. New equipment sales: Revenues from the sales of new equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Used equipment sales: Revenues from the sales of used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Parts sales: Revenues from the sales of equipment parts are recognized at the time of pick-up by the customer for parts counter sales transactions. For parts that are shipped to a customer, we made an accounting policy election permitted by Topic 606 to treat such shipping activities as fulfillment costs, which results in the fees for shipping activities being included in the parts sales transaction price. Services revenues: We derive our services primarily from maintenance and repair services to customers for their owned equipment. We recognize services revenues at the time such services are completed, which is when the customer obtains control of the promised service. Other revenues : Other revenues relate primarily to ancillary charges associated with equipment maintenance and repair services. Such revenues are recognized at the time the services are performed. Receivables and contract assets and liabilities We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address our total revenues from Topic 606 and Topic 842. We believe concentration of credit risk with respect to our receivables is limited because our customer base is comprised of a large number of geographically diverse customers. Our largest customer accounted for less than two percent of total revenues for the years ended December 31, 2019, 2018 and 2017. No single customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented in this Annual Report on Form 10-K. We manage credit risk through credit approvals, credit limits and other monitoring procedures. We maintain an allowance for doubtful accounts that reflects our estimate of the amount of our receivables that we will be unable to collect. We develop our estimate of this allowance based on our historical experience with specific customers, our understanding of our current economic circumstances and our own judgment as to the likelihood of ultimate payment. Our largest exposure to doubtful accounts is in our rental operations. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. During the year, we write-off customer account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. Such write-offs are charged against our allowance for doubtful accounts. Bad debt expense as a percentage of total revenues for the years ended December 31, 2019, 2018 and 2017 were approximately 0.5%, 0.2% and 0.4%, respectively. See Pending Accounting Pronouncements for new guidance related to expected credit losses. We do not have material contract assets, impairment losses associated therewith, or material contract liabilities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenues during the years ended December 31, 2019, 2018 or 2017 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amount of such revenue recognized during the years ended December 31, 2019, 2018 and 2017 was not material. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms are typically net 30 days, but can vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Sales tax amounts collected from customers are recorded on a net basis. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and stated on our contracts. Our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation. Also, our revenues do not include material amounts of variable consideration. Substantially all of our revenues are recognized at a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenues are generally recognized at the time of delivery to, or pick-up by, the customer. Inventories We measure inventory at the lower of cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. For new and used equipment inventories, cost is determined by specific-identification. For inventories of parts and supplies, cost is determined by using average cost. Long-lived Assets and Goodwill Rental Equipment The rental equipment we purchase is stated at cost and is depreciated over the estimated useful life of the equipment using the straight-line method. The depreciation is included in rental depreciation within our consolidated statements of income. 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. We additionally capitalize certain costs associated with internally developed software and cloud computing arrangements (see also Recently Adopted Accounting Pronouncements related to accounting guidance for cloud computing arrangements). 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, Depreciation expense on property and equipment is included in SG&A expenses on our consolidated statements of income. 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 When events or changes in circumstances indicate that the carrying amount of our rental fleet and property and equipment might not be recoverable, the expected future undiscounted cash flows from the assets are estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined based on discounted cash flows or appraised values, as appropriate. We did not record any impairment losses related to our rental equipment or property and equipment during 2019, 2018 or 2017. Goodwill We have made acquisitions in the past that included the recognition of goodwill. Goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment at least annually, 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. Prior to our adoption of ASU No. 2017-04, described below, Topic 350 required a two-step assessment to determine whether goodwill is impaired. The first step (“Step 1”) requires an entity to compare each reporting unit’s carrying value, including goodwill, and its fair value. If the carrying value exceeds the fair value, then the entity must perform the second step (“Step 2”), which is to compare the implied fair value of goodwill to its carrying value, and record an impairment charge for any excess of carrying value over implied fair value. An entity also has an option to perform a qualitative assessment to determine if the quantitative impairment test is necessary. Considerable judgment is required by management in using the qualitative approach to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. During 2018, we performed, as of October 1, a qualitative assessment and determined that it was more likely than not that the fair value of each of our reporting units was not less than its carrying value and, therefore, did not perform the prescribed quantitative goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount or “cushion” between our reporting unit’s fair value and carrying value as indicated on our most recent quantitative assessment. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) to simplify how all entities assess goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As amended, the goodwill impairment test consists of one step, comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. We adopted ASU 2017-04 as of October 1, 2019. Given that we have completed three acquisitions in 2018 and 2019, resulting in a substantial increase in the amount of goodwill, we performed a Step 1 quantitative assessment of goodwill impairment as of October 1, 2019, our annual impairment testing date. For all reporting units, we compared the carrying values of each reporting unit, inclusive of goodwill and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach. Based on this quantitative test, we determined that our Rental Component 1, Rental Component 2, Used Equipment Sales and Parts reporting units were not impaired as their respective fair values exceeded their respective carrying values by at least 24% or more. However, the results of the quantitative test indicated that the respective fair values of the New Equipment Sales and Service Revenues reporting units were less than the carrying value of each reporting unit, resulting in a goodwill impairment totaling $12.2 million, or $10.7 million and $1.5 million for the New Equipment Sales and Service Revenues reporting units, respectively. The New Equipment Sales reporting unit impairment was largely due to a sharp decline in our 2019 fourth quarter new equipment sales revenues as over 75% of our full-year new equipment sales decline occurred in the fourth quarter. This decline, combined with our new equipment sales revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value as of October 1, 2019, resulting in a $10.7 million impairment charge. The impairment of the Service Revenues reporting unit was largely due to our service revenues growth rate and operating results assumptions for the forecast period under the income approach, which resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value as of October 1, 2019, resulting in a $1.5 million impairment charge. Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, such as the timing and duration of economic expansion or contraction cycles in our business, interest rates, and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. The impairment charges are non-cash items and will not affect our cash flows, liquidity or borrowing capacity under the senior credit facility, and the charge is excluded from our financial results in evaluating our financial covenant under the senior secured credit facility. The changes in the carrying amount of goodwill for our reporting units for the years ended December 31, 2019 and 2018 were as follows (amounts in thousands): Eq. Rental Comp. 1 Eq. Rental Comp. 2 New Eq. Sales Used Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2017 $ — $ 18,700 $ — $ 6,137 $ 6,360 $ — $ 31,197 Increases (1) 34,297 23,836 10,434 2,324 2,550 1,205 74,646 Decreases — — — — — — — Balance at December 31, 2018 34,297 42,536 10,434 8,461 8,910 1,205 105,843 Increases (2) 14,918 19,775 254 500 2,045 291 37,783 Decreases (3) — — (10,688 ) — — (1,496 ) (12,184 ) Balance at December 31, 2019 $ 49,215 $ 62,311 $ — $ 8,961 $ 10,955 $ — $ 131,442 (1) Increases are related to goodwill recognized in the CEC and Rental Inc. 2018 acquisitions. See footnote 3 for further information (2) Increases are related to goodwill recognized in the WRI 2019 acquisition. See footnote 3 for further information (3) Decreases are related to the goodwill impairment calculated as of October 1, 2019. Intangible assets Our intangible assets include customer relationships, tradenames and leasehold interests that we acquired in recent acquisitions (see note 3 for further acquisition information). The customer relationships, tradenames and leasehold interests are amortized on a straight-line basis over estimated useful lives of ten, one and ten years, respectively, from the date of acquisition. The gross carrying values, accumulated amortization and net carrying amounts of our major classes of intangible assets as of December 31, 2019 and 2018 are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 39,500 $ 6,729 $ 32,771 $ 31,000 $ 2,850 $ 28,150 Tradenames 200 183 17 500 450 50 Leasehold interests 200 40 160 200 20 180 Total $ 39,900 $ 6,952 $ 32,948 $ 31,700 $ 3,320 $ 28,380 Intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The impairment loss to be recorded would be the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis or other valuation technique. Total amortization expense for the years ended December 31, 2019 and 2018 totaled $4.1 million and $3.3 million, respectively, and is included within SG&A expenses on the consolidated statements of income. There was no amortization expense for the year ended December 31, 2017. The following table presents the expected amortization expense for each of the next five years ending December 31 and thereafter for those intangible assets with remaining carrying value as of December 31, 2019 (dollar amounts in thousands): Amortization Expense 2020 $ 3,987 2021 3,970 2022 3,970 2023 3,970 2024 3,970 Thereafter 13,081 $ 32,948 Leases The Company as Lessee We determine whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset and we have the right to control the asset for a period of time in exchange for consideration. Lease arrangements can take several forms. Some arrangements are clearly within the scope of lease accounting, such as a real estate contract that provides an explicit contractual right to use a building for a specified period of time in exchange for consideration. However, the right to use an asset can also be conveyed through arrangements that are not leases in form, such as leases embedded within service and supply contracts. We analyze all arrangements with potential embedded leases to determine if an identified asset is present, if substantive substitution rights are present, and if the arrangement provides the customer control of the asset. Our lease portfolio is substantially comprised of operating leases related to leases of real estate and improvements at our branch locations. From time to time, we may also lease various types of small equipment and vehicles. Operating lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR ” ) at the commencement date in determining the present value of lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease. Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. For leases with terms greater than 12 mont |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | (3) Acquisitions 2019 Acquisitions Cobra Equipment Rentals, LLC (dba “We-Rent-It”) Effective February 1, 2019, we completed the acquisition of We-Rent-It (“WRI”), an equipment rental company with six branches located in central Texas. The acquisition expands our presence in the surrounding market. The aggregate consideration paid to the owners of WRI was approximately $108.5 million. The acquisition and related fees and expenses were funded from borrowings under our Credit Facility (defined below). The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. The amounts presented below should not significantly change upon settlement of the final closing statement in the first quarter of 2020. $’s in thousands Cash $ 1,745 Accounts receivable 5,119 Inventory 731 Prepaid expenses and other assets 544 Rental equipment 51,747 Property and equipment 3,207 Other assets 21 Intangible assets (1) 8,700 Total identifiable assets acquired 71,814 Accounts payable (115 ) Accrued expenses payable and other liabilities (991 ) Total liabilities assumed (1,106 ) Net identifiable assets acquired 70,708 Goodwill (2) 37,783 Net assets acquired $ 108,491 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 8,500 10 Tradenames 200 1 $ 8,700 (2) We have allocated the $37.8 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 14,918 Rental Component 2 19,775 New Equipment 254 Used Equipment 500 Parts 2,045 Service 291 $ 37,783 The level of goodwill that resulted from the WRI acquisition is primarily reflective of WRI’s going-concern value, the value of WRI’s assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. We currently expect the goodwill recognized to be 100% deductible for income tax purposes. Total WRI acquisition costs were $0.4 million. Since our acquisition of WRI on February 1, 2019, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired WRI locations, and it is impractical to reasonably estimate the amount of WRI revenues and earnings since the acquisition date. 2018 Acquisitions Contractors Equipment Center (“CEC”) Effective January 1, 2018, we completed the acquisition of CEC, a non-residential construction focused equipment rental company with three branches located in the greater Denver, Colorado area. The acquisition significantly expands our presence in the Denver area and surrounding markets. The aggregate consideration paid to the pre-acquisition owners of CEC was approximately $132.4 million. The acquisition and related fees and expenses were funded through available cash. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. $’s in thousands Cash $ 1,244 Accounts receivable 7,583 Inventory 504 Prepaid expenses and other assets 324 Rental equipment 55,342 Property and equipment 2,700 Intangible assets (1) 21,500 Total identifiable assets acquired 89,197 Accounts payable (1,023 ) Accrued expenses payable and other liabilities (876 ) Total liabilities assumed (1,899 ) Net identifiable assets acquired 87,298 Goodwill (2) 45,092 Net assets acquired $ 132,390 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 21,000 10 Tradenames 300 1 Leasehold interests 200 10 $ 21,500 (2) We have allocated the $45.1 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 25,233 Rental Component 2 18,391 New Equipment 217 Used Equipment 632 Parts 379 Service 240 $ 45,092 The level of goodwill that resulted from the CEC acquisition is primarily reflective of CEC’s going-concern value, the value of CEC’s assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. We currently expect the goodwill recognized to be 100% deductible for income tax purposes. Total CEC acquisition costs were $1.0 million. Since our acquisition of CEC on January 1, 2018, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired CEC locations, and it is impractical to reasonably estimate the amount of CEC revenues and earnings since the acquisition date. Rental, LLC (dba “Rental Inc.”) Effective April 1, 2018, we completed the acquisition of Rental Inc., a non-residential equipment rental and distribution company with five branches located in Alabama, Florida and Western Georgia. The acquisition expands our presence in the surrounding market. The aggregate consideration paid to the owners of Rental Inc. was approximately $68.6 million. The acquisition and related fees and expenses were funded through available cash and from borrowings under our Credit Facility (as defined below). The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. $’s in thousands Cash $ 260 Accounts receivable 2,873 Inventory 5,324 Prepaid expenses and other assets 47 Rental equipment 22,578 Property and equipment 1,935 Intangible assets (1) 10,200 Total identifiable assets acquired 43,217 Accounts payable (439 ) Manufacturer flooring plans payable (3,293 ) Accrued expenses payable and other liabilities (469 ) Total liabilities assumed (4,201 ) Net identifiable assets acquired 39,016 Goodwill (2) 29,554 Net assets acquired $ 68,570 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 10,000 10 Tradenames 200 1 $ 10,200 (2) We have allocated the $29.6 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 9,064 Rental Component 2 5,445 New Equipment 10,217 Used Equipment 1,692 Parts 2,171 Service 965 $ 29,554 Included in the total goodwill amount of $29.6 million is approximately $3.4 million of accrued purchase price consideration to be paid to the sellers pursuant to the terms of the purchase agreement among the parties named thereto. The level of goodwill that resulted from the Rental Inc. acquisition is primarily reflective of Rental Inc.’s going-concern value, the value of Rental Inc.’s assembled workforce, new customer relationships expected to arise from the acquisition and expected synergies from combining operations. We currently expect the goodwill recognized to be 100% deductible for income tax purposes. Total Rental Inc. acquisition costs were $0.3 million. Since our acquisition of Rental Inc. on April 1, 2018, significant amounts of equipment rental fleet have been moved between H&E locations and the acquired Rental Inc. locations, and it is impractical to reasonably estimate the amount of Rental Inc. revenues and earnings since the acquisition date. Pro forma financial information We completed the CEC acquisition effective January 1, 2018. Therefore, the operating results of CEC are included in our reported condensed consolidated statements of income for the full year ended December 31, 2018. We completed the Rental Inc. acquisition effective April 1, 2018. Therefore, our reported consolidated statements of income for the year ended December 31, 2018 do not include Rental Inc. for the period from January 1, 2018 through March 31, 2018. We completed the WRI acquisition on February 1, 2019. Therefore, our reported condensed consolidated statements for the year ended December 31, 2019 do not include WRI for the month of January 2019. Pursuant to Topic 805, Business Combinations (amounts in thousands) Year Ended December 31, 2017 H&E(1) CEC Rental Inc. Total Total revenues $ 1,030,019 $ 36,790 $ 34,942 $ 1,101,751 Pretax income 59,344 3,043 7,267 69,654 Pro forma adjustments to pretax income: Impact of fair value mark-ups/useful life changes on depreciation (2) — (3,575 ) (2,794 ) (6,369 ) Intangible asset amortization (3) — (2,420 ) (1,200 ) (3,620 ) Interest expense (4) — — (1,609 ) (1,609 ) Elimination of merger related costs 788 4,497 — 5,285 Elimination of historic interest expense (5) — 1,966 382 2,348 Pro forma pretax income 60,132 3,511 2,046 65,689 Income tax expense (50,511 ) (2,949 ) (1,719 ) (55,179 ) Net income $ 110,643 $ 6,460 $ 3,765 $ 120,868 Net income per share – basic (6) $ 3.12 $ 0.18 $ 0.11 $ 3.40 Net income per share – diluted (6) $ 3.10 $ 0.18 $ 0.11 $ 3.39 (1) Amounts presented above for “H&E” are derived from the Company’s consolidated statement of income in this Annual Report on Form 10-K for the year ended December 31, 2017. (2) Depreciation of rental equipment and non-rental equipment were adjusted for the fair value markups, and the changes in useful lives and salvage values of the equipment acquired in the acquisitions. (3) Represents the amortization of the intangible assets acquired in the acquisitions. (4) A portion of the consideration paid for Rental Inc. was funded with borrowings from our Credit Facility. Interest expense was adjusted to reflect the additional debt resulting from such acquisition. (5) Represents the elimination of historic debt of CEC and Rental Inc. that is not part of the combined entity. (6) Because of the method used in calculating per share data, the summation of entities may not necessarily total to the per share data computed for the total company due to rounding. The pro forma information below gives effect to the Rental Inc. and WRI acquisitions as if they had been completed on January 1, 2018 (the “pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition s , nor does it reflect additional revenue opportunities following the acquisition s . The unaudited tables below present unaudited pro forma consolidated statements of income informatio n for the year December 31, 2018 as if Rental Inc. and WRI were included in our consolidated results for the entire period presented. (amounts in thousands, except per share data) Year Ended December 31, 2018 H&E(1) Rental Inc.(7) We-Rent-It Total Total revenues $ 1,238,961 $ 7,408 $ 36,002 $ 1,282,371 Pretax income 104,663 1,020 6,892 112,575 Pro forma adjustments to pretax income: Impact of fair value mark-ups/useful life changes on depreciation (2) — (749 ) (4,452 ) (5,201 ) Intangible asset amortization (3) — (300 ) (1,050 ) (1,350 ) Interest expense (4) — (480 ) (5,664 ) (6,144 ) Elimination of historic interest expense (5) — 82 517 599 Pro forma pretax income (loss) 104,663 (427 ) (3,757 ) 100,479 Income tax expense (benefit) 28,040 (114 ) (973 ) 26,953 Net income (loss) $ 76,623 $ (313 ) $ (2,784 ) $ 73,526 Net income (loss) per share – basic (6) $ 2.15 $ (0.01 ) $ (0.08 ) $ 2.05 Net income (loss) per share – diluted (6) $ 2.13 $ (0.01 ) $ (0.08 ) $ 2.04 (1) Amounts presented above for “H&E” are derived from the Company’s consolidated statement of income in this Annual Report on Form 10-K for the year ended December 31, 2018 and includes actual results for CEC for the full twelve months ended December 31, 2018 and actual results for Rental Inc. for the period April 1, 2018 through December 31, 2018. (2) Depreciation of rental equipment and non-rental equipment were adjusted for the fair value markups, and the changes in useful lives and salvage values of the equipment acquired in the acquisitions. (3) Represents the amortization of the intangible assets acquired in the acquisitions. (4) Interest expense was adjusted to reflect the additional debt resulting from the acquisition. (5) Represents the elimination of historic debt of Rental Inc. and WRI that is not part of the combined entity. (6) Because of the method used in calculating per share data, the summation of entities may not necessarily total to the per share data computed for the total company due to rounding. (7) Represents Rental Inc. pro forma operating results for the three month period ended March 31, 2018. We completed the Rental Inc. acquisition effective April 1, 2018. |
Receivables
Receivables | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Receivables | (4) Receivables Receivables consisted of the following at December 31, (amounts in thousands): 2019 2018 Trade receivables $ 186,472 $ 194,601 Unbilled rental revenue 9,529 8,833 Income tax receivables 1,405 2,181 Other 34 35 197,440 205,650 Less allowance for doubtful accounts (5,236 ) (4,094 ) Total receivables, net $ 192,204 $ 201,556 |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | (5) Inventories Inventories consisted of the following at December 31, (amounts in thousands): 2019 2018 New equipment $ 65,549 $ 84,603 Used equipment 1,993 1,980 Parts, supplies and other 17,936 18,015 Total inventories, net $ 85,478 $ 104,598 The above amounts are presented net of reserves for inventory obsolescence at December 31, 2019 and 2018 totaling approximately $0.3 million and $0.4 million, respectively. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
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): 2019 2018 Land $ 7,597 $ 7,597 Transportation equipment 130,099 106,011 Building and leasehold improvements 69,031 63,060 Office and computer equipment 53,597 51,758 Machinery and equipment 18,732 17,811 Property under capital leases — 2,417 Construction in progress 8,290 9,129 287,346 257,783 Less accumulated depreciation and amortization (156,782 ) (142,662 ) Total net property and equipment $ 130,564 $ 115,121 Total depreciation and amortization on property and equipment was $28.4 million, $24.6 million and $23.8 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
Manufacturer Flooring Plans Pay
Manufacturer Flooring Plans Payable | 12 Months Ended |
Dec. 31, 2019 | |
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 (4.75% at December 31, 2019) plus an applicable margin at December 31, 2019. 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, 2019 for the following years ending December 31 until paid are as follows (amounts in thousands): 2020 $ 11,658 2021 13,369 2022 174 Total $ 25,201 |
Accrued Expenses Payable and Ot
Accrued Expenses Payable and Other Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
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): 2019 2018 Payroll and related liabilities $ 30,903 $ 24,864 Sales, use and property taxes 11,042 10,069 Accrued interest 18,804 18,771 Accrued insurance 5,837 4,328 Deferred revenue 4,038 5,973 Other 7,758 9,366 Total accrued expenses payable and other liabilities $ 78,382 $ 73,371 |
Senior Unsecured Notes
Senior Unsecured Notes | 12 Months Ended |
Dec. 31, 2019 | |
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. In connection with the above transactions, we recorded a one-time loss on the early extinguishment of debt of approximately $25.4 million, or approximately $18.9 million after-tax, reflecting payment of $12.8 million of tender premiums and $10.5 million of premiums in accordance with the indenture governing the Old Notes to redeem the Old Notes that remained outstanding following completion of the Tender Offer, combined with the write-off of approximately $2.0 million of unamortized note discount related to the Old Notes. Additional transaction costs incurred in connection with the offering of the New Notes totaled approximately $1.6 million. 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, 2019, 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 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 registration rights agreements entered into among us, the guarantors of the New Notes and the Add-On Notes, respectively, and the initial purchasers of the New Notes and the Add-On Notes, respectively, we agreed to make offers to exchange (collectively, the “Exchange Offer”) the New Notes and Add-On Notes and the respective guarantees for registered, publicly tradable notes and guarantees that have terms identical in all material respects to the New Notes and the Add-On Notes, respectively (except that the exchange notes do not contain any transfer restrictions) within a certain period of time following the completion of the respective note offerings. We completed the Exchange Offer for the New Notes and the Add-On Notes in March 2018. The following table reconciles our Senior Unsecured Notes to our Consolidated Balance Sheets (amounts in thousands): Balance at December 31, 2017 $ 944,088 Accretion of discount through December 31, 2018 1,539 Amortization of note premium through December 31, 2018 (1,062 ) Additional deferred financing costs on New Notes (97 ) Amortization of deferred financing costs through December 31, 2018 312 Balance at December 31, 2018 $ 944,780 Accretion of discount through December 31, 2019 1,539 Amortization of note premium through December 31, 2019 (1,062 ) Additional deferred financing costs on New Notes — Amortization of deferred financing costs through December 31, 2019 309 Balance at December 31, 2019 $ 945,566 |
Senior Secured Credit Facility
Senior Secured Credit Facility | 12 Months Ended |
Dec. 31, 2019 | |
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, H&E Equipment Services (Mid-Atlantic), 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) extended the maturity date of the credit facility from May 21, 2019 to December 22, 2022, (ii) increased the commitments under the senior secured asset based revolver provided for therein from $602.5 million to $750 million, (iii) increased the uncommitted incremental revolving capacity from $150 million to $250 million, (iv) provided 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) lowered 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) lowered the margin applicable to the letter of credit fee to between 1.50% and 2.00%, depending on the Average Availability, and (vii) permitted, 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). On February 1, 2019, we further amended and extended the Amended and Restated Credit Agreement with the First Amendment to the Fifth Amended and Restated Credit Agreement (the “First Amendment”) by and among the Company, Great Northern Equipment, Inc., H&E Equipment Services (California), LLC, H&E Equipment Services (Mid-Atlantic), 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 First Amendment, among other things, (i) extended the maturity date of the credit facility from December 22, 2022 to January 31, 2024, and (ii) lowered the interest rate in the case of LIBOR revolving loans, to LIBOR plus an applicable margin of 1.25% to 1.75%, depending on the Average Availability and (iii) lowered the interest rate in the case of Base Rate loans, to the Base Rate (as defined in the Amended and Restated Credit Agreement) plus an applicable margin of 0.25% to 0.75%, depending on the Average Availability . As amended, 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, 2019, we had $216.9 million in borrowings outstanding under the Credit Facility and could borrow up to $525.4 million and remain in compliance with the debt covenants under the Company’s credit facility. At February 18, 2020, we had $559.4 million of available borrowings under our Credit Facility, net of a $7.7 million outstanding letter of credit. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | (11) Leases We adopted Topic 842 on January 1, 2019. Because we adopted Topic 842 using the transition method that allowed us to initially apply Topic 842 as of January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption, prior year financial statements were not recast under the new standard and, therefore, those prior year amounts are not presented below. When available, we use the rate implicit in the lease to discount lease payments to present value; however, most of our leases do not provide a readily determinable implicit rate. Therefore, we estimate our IBR to discount the lease payments based on information available at lease commencement. Our IBR represents a fully collateralized rate for a fully amortizing loan with the same term as the lease At December 31, 2019, as disclosed in our consolidated balance sheet, we had net operating lease right-of-use assets of $156.6 million and net finance lease right-of-use assets of $0.4 million. Our operating lease liabilities at December 31, 2019 were $159.3 million and finance lease liabilities were $0.6 million. The weighted average remaining lease term for operating leases was approximately 10.4 years and the weighted average remaining lease term for finance leases was approximately 2.3 years. The weighted average discount rate for operating and finance leases was approximately 6.8% and 5.9%, respectively. The table below presents certain information related to lease costs, under Topic 842, for our operating and finance leases for the years ended December 31, (in thousands). Classification Year Ended December 31, 2019 Operating lease cost SG&A expenses $ 22,293 Finance lease costs Amortization of leased assets SG&A expenses 162 Interest on lease liabilities Interest expense 39 Variable lease cost SG&A expenses 523 Sublease income Other income (567 ) Total lease cost $ 22,450 Under Topic 840, rent expense under non-cancelable operating lease agreements for the years ended December 31, 2018 and 2017 amounted to approximately $23.1 million and $20.1 million, respectively. The table below presents supplemental cash flow information related to leases for the year ended December 31, 2019 (in thousands). Year Ended December 31, 2019 Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows for operating leases $ 21,720 Operating cash flows for finance leases 39 Finance cash flows for finance leases 232 The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on our consolidated balance sheet as of December 31, 2019 (in thousands). Operating Leases Finance Leases 2020 $ 21,697 $ 270 2021 21,672 270 2022 21,508 45 2023 21,506 — 2024 21,740 — Thereafter 114,792 — Total minimum lease payments 222,915 585 Less: amount of lease payments representing interest (63,650 ) (35 ) Present value of future minimum lease payments $ 159,265 $ 550 Under Topic 840, future minimum operating lease payments existing at December 31, 2018 for the years ending December 31, 2019, 2020, 2021, 2022, 2023 and thereafter are $21.8 million, $21.9 million, $21.2 million, $19.9 million, $17.1 million and $86.4 million, respectively. Under Topic 840, future minimum capital lease payments existing at December 31, 2018 for the years ending December 31, 2019, 2020, 2021, and interest are $0.3 million, $0.3 million, $0.3 million, and $0.1 million, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
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, in 2017 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 accounting for the income tax effects of the Act is complete and there were no changes made to the enactment-date accounting during 2018 and 2019. Our income tax provision (benefit) for the years ended December 31, 2019, 2018 and 2017, consists of the following (amounts in thousands): Current Deferred Total Year ended December 31, 2019: U.S. Federal $ (761 ) $ 25,134 $ 24,373 State 2,398 1,879 4,277 $ 1,637 $ 27,013 $ 28,650 Year ended December 31, 2018: U.S. Federal $ (1,523 ) $ 23,127 $ 21,604 State 2,868 3,568 6,436 $ 1,345 $ 26,695 $ 28,040 Year ended December 31, 2017: U.S. Federal $ — $ (54,241 ) $ (54,241 ) State 221 3,706 3,927 $ 221 $ (50,535 ) $ (50,314 ) Significant components of our deferred income tax assets and liabilities as of December 31 are as follows (amounts in thousands): 2019 2018 Deferred tax assets: Accounts receivable $ 1,283 $ 1,010 Inventories 83 93 Net operating losses 101,212 86,859 AMT and tax credits 1,334 2,110 Sec 263A costs 608 752 Accrued liabilities 2,970 2,869 Deferred compensation 1,499 1,561 Accrued interest 410 387 Stock-based compensation 247 146 Goodwill and intangible assets 711 346 Other assets 597 415 110,954 96,548 Valuation allowance — (609 ) 110,954 95,939 Deferred tax liabilities: Property and equipment (287,654 ) (245,198 ) Investments (1,072 ) (1,076 ) Goodwill and intangible assets (2,354 ) (2,778 ) (291,080 ) (249,052 ) Net deferred tax liabilities $ (180,126 ) $ (153,113 ) The reconciliation between income taxes computed using the statutory federal income tax rate (21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017) to the actual income tax expense (benefit) is below (amounts in thousands): 2019 2018 2017 Computed tax at statutory rates $ 24,331 $ 21,979 $ 20,770 Permanent items - other 1,065 1,021 911 Permanent items - excess of tax deductible goodwill — — (2,130 ) State income tax, net of federal tax effect 6,944 5,246 2,563 Change in valuation allowance (609 ) (123 ) 397 Change in uncertain tax positions — (83 ) (5,960 ) Other - change in deferred state rate (3,081 ) — — Impact of the Act federal rate change — — (66,865 ) $ 28,650 $ 28,040 $ (50,314 ) At December 31, 2019, we had available federal net operating loss carry forwards of approximately $86.2 million, which expire in varying amounts from 2030 through 2036 and $366.9 million, which does not expire. We also had federal alternative minimum tax credit carry forwards at December 31, 2019 of approximately $1.5 million which do not expire and $0.4 million general business credit carry forwards that expire in varying amounts from 2026 and 2037, and state income tax credits of $0.2 million that expire in varying amounts beginning in 2022. In accordance with changes made by the Act, our AMT credit became refundable between 2018 and 2022; therefore, we have reclassified $0.8 million from deferred income taxes to income tax receivable during the year ended December 31, 2019. 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 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, 2019. For the year ended December 31, 2019, we decreased our valuation allowance by $0.6 million for certain state net operating losses that are expected to be fully realized. A reconciliation of the beginning and ending balances of the total amounts of gross unrecognized tax benefits is as follows (in thousands): 2019 2018 Gross unrecognized tax benefits at January 1 $ — $ 106 Increases in tax positions taken in prior years — — Decreases in tax positions taken in prior years — (106 ) Lapse in statute of limitations — — Gross unrecognized tax benefits at December 31 $ — $ — As of December 31, 2019 and 2018, we have no reserves established for the gross amount of unrecognized tax benefits. 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 2016 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, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | (13) Commitments and Contingencies Legal Matters As further discussed in Note 2 to these consolidated financial statements, we are exposed to various claims relating to our business, including those for which we retain portions of the losses through the application of deductibles and self-insured retentions, or self-insurance. Losses that exceed our deductibles and self-insured retentions are insured through various commercial lines of insurance policies. As of February 20, 2020, we are aware of a contingent liability related to an automobile liability claim for which we have determined that an unfavorable outcome is probable. Based on the information currently available to us, we cannot predict the timing of the claim’s ultimate resolution or reasonably estimate the amount or a range of potential losses that will arise from the claim. The ultimate loss on the insured claim could be material. Pursuant to ASC 450, Contingencies, and other relevant guidance, when the contingency become both probable and estimable, our consolidated balance sheets will reflect a liability for the total amount of estimated claim and an asset for the portion of the claim recoverable through insurance. This gross-up presentation could be material to our consolidated balance sheets. Our loss exposure, however, is limited to our insurance policy deductible, which is immaterial to our consolidated statements of income. We are also involved in various other 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, 2019 and 2018, respectively. The letters of credit expire in May 2020 one-year |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 2018 and 2017, we contributed to the plan, net of employee forfeitures, $5.5 million, $2.5 million and $2.2 million, respectively. |
Deferred Compensation Plans
Deferred Compensation Plans | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019, 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 2019 calendar plan year was 5.50%. The aggregate deferred compensation payable at December 31, 201 9 and December 31, 201 8 was approximately $ million and $ 2.0 million, respectively. Included in these amount s at December 31, 201 9 and 201 8 was accrued interest of $ million and $ million, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | (16) Related Party Transactions Mr. John M. Engquist, who served as the Company’s Executive Chairman of the Board for the year ended December 31, 2019 and the Company’s Chief Executive Officer for the years ended December 31, 2018 and 2017, has a 48.0% ownership interest in Perkins-McKenzie Insurance Agency, Inc. (“Perkins-McKenzie”), an insurance brokerage firm. 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 $0.9 million, $0.8 million and $0.8 million for the years ended December 31, 2019, 2018 and 2017, 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, 2019, 2018 and 2017, our purchases totaled $0.3 million, $0.1 million and $0.4 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, 2019 | |
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, 2019 and 2018 (amounts in thousands, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2019: Total revenues $ 313,638 $ 333,597 $ 352,997 $ 348,133 Income from operations (1) 35,675 47,673 55,503 41,310 Income before provision for income taxes (1) 19,352 30,895 38,760 26,854 Net income (1) 14,243 22,614 28,431 21,923 Basic net income per common share (2) $ 0.40 $ 0.63 $ 0.79 $ 0.61 Diluted net income per common share (2) $ 0.40 $ 0.63 $ 0.79 $ 0.61 First Quarter Second Quarter Third Quarter Fourth Quarter 2018: Total revenues $ 260,482 $ 310,364 $ 322,141 $ 345,974 Income from operations 27,326 43,103 45,318 50,899 Income before provision for income taxes 13,068 27,869 28,971 34,755 Net income 9,478 20,771 21,314 25,060 Basic net income per common share (2) $ 0.27 $ 0.58 $ 0.60 $ 0.70 Diluted net income per common share (2) $ 0.26 $ 0.58 $ 0.59 $ 0.70 (1) During the quarter ended December 31, 2019, we recorded non-cash impairment charge totaling approximately $12.2 million, or $9.9 million after-tax, related to the impairment of goodwill. See note 2 to the consolidated financial statements for additional information. ( 2 ) Because of the method used in calculating per share data, the summation of quarterly per share data may not necessarily total to the per share data computed for the entire year due to rounding. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2019 | |
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 revenue streams and 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, 2019 2018 2017 Segment Revenues: Equipment rentals $ 766,354 $ 627,181 $ 508,121 New equipment sales 239,091 262,948 203,301 Used equipment sales 139,349 125,125 107,329 Parts sales 123,855 120,454 114,253 Services revenues 67,941 63,488 62,873 Total segmented revenues 1,336,590 1,199,196 995,877 Non-Segmented revenues 11,775 39,765 34,142 Total revenues $ 1,348,365 $ 1,238,961 $ 1,030,019 Segment Gross Profit: Equipment rentals $ 346,882 $ 273,759 $ 213,522 New equipment sales 27,719 30,891 22,599 Used equipment sales 47,328 39,073 33,197 Parts sales 32,892 32,191 31,118 Services revenues 45,995 42,160 41,762 Total gross profit from segmented revenues 500,816 418,074 342,198 Non-Segmented gross profit (loss) (1,646 ) 20,460 17,710 Total gross profit $ 499,170 $ 438,534 $ 359,908 December 31, 2019 2018 Segment identified assets: Equipment sales $ 67,542 $ 86,583 Equipment rentals 1,217,673 1,141,498 Parts and service 17,936 18,015 Total segment identified assets 1,303,151 1,246,096 Non-Segmented identified assets 671,459 481,085 Total assets $ 1,974,610 $ 1,727,181 The Company operates primarily in the United States and our sales to international customers for the years ended December 31, 2019, 2018 and 2017 were 0.2%, 0.1% and 0.4%, 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, 2019 | |
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. are not included within the consolidating financial statements because H&E Finance Corp. ha s no assets or operations. CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 14,247 $ — $ — $ 14,247 Receivables, net 164,260 27,944 — 192,204 Inventories, net 81,945 3,533 — 85,478 Prepaid expenses and other assets 10,129 133 — 10,262 Rental equipment, net 1,062,154 155,519 — 1,217,673 Property and equipment, net 111,429 19,135 — 130,564 Operating lease right-of-use assets, net 137,625 18,945 — 156,570 Finance lease right-of-use assets, net — 365 — 365 Deferred financing costs, net 2,857 — — 2,857 Investment in guarantor subsidiaries 235,749 — (235,749 ) — Intangible assets, net 32,948 — — 32,948 Goodwill 101,916 29,526 — 131,442 Total assets $ 1,955,259 $ 255,100 $ (235,749 ) $ 1,974,610 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility 216,879 $ — $ — $ 216,879 Accounts payable 56,225 2,628 — 58,853 Manufacturer flooring plans payable 25,201 — — 25,201 Accrued expenses payable and other liabilities 81,646 (3,264 ) — 78,382 Dividends payable 231 (60 ) — 171 Senior unsecured notes, net 945,566 — — 945,566 Operating lease right-of-use liabilities 139,768 19,497 — 159,265 Finance lease right-of-use liabilities — 550 — 550 Deferred income taxes 180,126 — — 180,126 Deferred compensation payable 2,098 — — 2,098 Total liabilities 1,647,740 19,351 — 1,667,091 Stockholders’ equity 307,519 235,749 (235,749 ) 307,519 Total liabilities and stockholders’ equity $ 1,955,259 $ 255,100 $ (235,749 ) $ 1,974,610 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 16,677 $ — $ — $ 16,677 Receivables, net 166,393 35,163 — 201,556 Inventories, net 94,483 10,115 — 104,598 Prepaid expenses and other assets 10,382 126 — 10,508 Rental equipment, net 983,281 158,217 — 1,141,498 Property and equipment, net 98,251 16,870 — 115,121 Deferred financing costs, net 3,000 — — 3,000 Investment in guarantor subsidiaries 246,309 — (246,309 ) — Intangible assets, net 28,380 — — 28,380 Goodwill 76,317 29,526 — 105,843 Total assets $ 1,723,473 $ 250,017 $ (246,309 ) $ 1,727,181 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ 170,761 $ — $ — $ 170,761 Accounts payable 95,866 5,974 — 101,840 Manufacturer flooring plans payable 23,178 488 — 23,666 Accrued expenses payable and other liabilities 76,798 (3,427 ) — 73,371 Dividends payable 185 (53 ) — 132 Senior unsecured notes, net 944,780 — — 944,780 Capital leases payable — 726 — 726 Deferred income taxes 153,113 — — 153,113 Deferred compensation payable 1,989 — — 1,989 Total liabilities 1,466,670 3,708 — 1,470,378 Stockholders’ equity 256,803 246,309 (246,309 ) 256,803 Total liabilities and stockholders’ equity $ 1,723,473 $ 250,017 $ (246,309 ) $ 1,727,181 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 662,578 $ 103,776 $ — $ 766,354 New equipment sales 213,877 25,214 — 239,091 Used equipment sales 118,504 20,845 — 139,349 Parts sales 107,160 16,695 — 123,855 Services revenues 57,835 10,106 — 67,941 Other 9,854 1,921 — 11,775 Total revenues 1,169,808 178,557 — 1,348,365 Cost of revenues: Rental depreciation 211,252 32,528 — 243,780 Rental expense 90,485 14,594 — 105,079 Rental other 59,543 11,070 — 70,613 361,280 58,192 — 419,472 New equipment sales 189,045 22,327 — 211,372 Used equipment sales 78,703 13,318 — 92,021 Parts sales 79,196 11,767 — 90,963 Services revenues 18,870 3,076 — 21,946 Other 11,807 1,614 — 13,421 Total cost of revenues 738,901 110,294 — 849,195 Gross profit (loss): Equipment rentals 301,298 45,584 — 346,882 New equipment sales 24,832 2,887 — 27,719 Used equipment sales 39,801 7,527 — 47,328 Parts sales 27,964 4,928 — 32,892 Services revenues 38,965 7,030 — 45,995 Other (1,953 ) 307 — (1,646 ) Gross profit 430,907 68,263 — 499,170 Selling, general and administrative expenses 270,533 40,493 — 311,026 Impairment of goodwill 12,184 — — 12,184 Equity in earnings of guarantor subsidiaries 15,441 — (15,441 ) — Merger costs 416 — — 416 Gain from sales of property and equipment, net 3,957 660 — 4,617 Income from operations 167,172 28,430 (15,441 ) 180,161 Other income (expense): Interest expense (55,056 ) (13,221 ) — (68,277 ) Other, net 3,745 232 — 3,977 Total other expense, net (51,311 ) (12,989 ) — (64,300 ) Income before provision for income taxes 115,861 15,441 (15,441 ) 115,861 Provision for income taxes 28,650 — — 28,650 Net income $ 87,211 $ 15,441 $ (15,441 ) $ 87,211 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 535,551 $ 91,630 $ — $ 627,181 New equipment sales 207,564 55,384 — 262,948 Used equipment sales 102,005 23,120 — 125,125 Parts sales 103,586 16,868 — 120,454 Services revenues 53,534 9,954 — 63,488 Other 33,702 6,063 — 39,765 Total revenues 1,035,942 203,019 — 1,238,961 Cost of revenues: Rental depreciation 178,371 30,082 — 208,453 Rental expense 76,487 13,033 — 89,520 Rental other 46,039 9,410 — 55,449 300,897 52,525 — 353,422 New equipment sales 183,164 48,893 — 232,057 Used equipment sales 69,960 16,092 — 86,052 Parts sales 76,425 11,838 — 88,263 Services revenues 18,100 3,228 — 21,328 Other 16,706 2,599 — 19,305 Total cost of revenues 665,252 135,175 — 800,427 Gross profit (loss): Equipment rentals 234,654 39,105 — 273,759 New equipment sales 24,400 6,491 — 30,891 Used equipment sales 32,045 7,028 — 39,073 Parts sales 27,161 5,030 — 32,191 Services revenues 35,434 6,726 — 42,160 Other 16,996 3,464 — 20,460 Gross profit 370,690 67,844 — 438,534 Selling, general and administrative expenses 232,892 45,406 — 278,298 Equity in earnings of guarantor subsidiaries 13,247 — (13,247 ) — Merger costs 708 — — 708 Gain from sales of property and equipment, net 6,475 643 — 7,118 Income from operations 156,812 23,081 (13,247 ) 166,646 Other income (expense): Interest expense (53,681 ) (10,026 ) — (63,707 ) Other, net 1,532 192 — 1,724 Total other expense, net (52,149 ) (9,834 ) — (61,983 ) Income before provision for income taxes 104,663 13,247 (13,247 ) 104,663 Provision for income taxes 28,040 — — 28,040 Net income $ 76,623 $ 13,247 $ (13,247 ) $ 76,623 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 418,769 $ 89,352 $ — $ 508,121 New equipment sales 166,730 36,571 — 203,301 Used equipment sales 84,741 22,588 — 107,329 Parts sales 97,852 16,401 — 114,253 Services revenues 52,807 10,066 — 62,873 Other 28,133 6,009 — 34,142 Total revenues 849,032 180,987 — 1,030,019 Cost of revenues: Rental depreciation 140,489 28,966 — 169,455 Rental expense 64,598 13,108 — 77,706 Rental other 38,228 9,210 — 47,438 243,315 51,284 — 294,599 New equipment sales 148,163 32,539 — 180,702 Used equipment sales 59,481 14,651 — 74,132 Parts sales 71,603 11,532 — 83,135 Services revenues 17,851 3,260 — 21,111 Other 13,840 2,592 — 16,432 Total cost of revenues 554,253 115,858 — 670,111 Gross profit (loss): Equipment rentals 175,454 38,068 — 213,522 New equipment sales 18,567 4,032 — 22,599 Used equipment sales 25,260 7,937 — 33,197 Parts sales 26,249 4,869 — 31,118 Services revenues 34,956 6,806 — 41,762 Other 14,293 3,417 — 17,710 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 fees, 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 CASH FLOWS Year Ended December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 87,211 $ 15,441 $ (15,441 ) $ 87,211 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 25,058 3,367 — 28,425 Depreciation on rental equipment 211,252 32,528 — 243,780 Amortization of intangible assets 4,132 — — 4,132 Amortization of deferred financing costs 1,010 — — 1,010 Accretion of note discount, net of premium amortization 477 — — 477 Non-cash operating lease expense 10,306 1,374 — 11,680 Amortization of finance lease right-of-use assets — 163 — 163 Provision for losses on accounts receivable 5,382 411 — 5,793 Provision for inventory obsolescence 152 — — 152 Deferred income taxes 27,013 — — 27,013 Impairment of goodwill 12,184 — — 12,184 Stock-based compensation expense 4,670 — — 4,670 Gain from sales of property and equipment, net (3,957 ) (660 ) — (4,617 ) Gain from sales of rental equipment, net (39,102 ) (7,511 ) — (46,613 ) Equity in earnings of guarantor subsidiaries (15,441 ) — 15,441 — Changes in operating assets and liabilities, net of acquisitions: Receivables 2,414 6,808 — 9,222 Inventories (21,121 ) 1,484 — (19,637 ) Prepaid expenses and other assets 274 (7 ) — 267 Accounts payable (40,012 ) (3,346 ) — (43,358 ) Manufacturer flooring plans payable 2,023 (488 ) — 1,535 Accrued expenses payable and other liabilities (3,597 ) (783 ) — (4,380 ) Deferred compensation payable 109 — — 109 Net cash provided by operating activities 270,437 48,781 — 319,218 Cash flows from investing activities: Acquisition of business, net of cash acquired (106,746 ) — — (106,746 ) Purchases of property and equipment (36,824 ) (6,287 ) — (43,111 ) Purchases of rental equipment (272,015 ) (37,639 ) — (309,654 ) Proceeds from sales of property and equipment 5,276 774 — 6,050 Proceeds from sales of rental equipment 107,127 20,431 — 127,558 Investment in subsidiaries 26,001 — (26,001 ) — Net cash used in investing activities (277,181 ) (22,721 ) (26,001 ) (325,903 ) Cash flows from financing activities: Purchases of treasury stock (1,684 ) — — (1,684 ) Borrowings on senior secured credit facility 1,457,744 — — 1,457,744 Payments on senior secured credit facility (1,411,626 ) — — (1,411,626 ) Dividends paid (39,381 ) (7 ) — (39,388 ) Payments of deferred financing costs (559 ) — — (559 ) Payments of finance lease obligations (56 ) (176 ) — (232 ) Capital contributions — (26,001 ) 26,001 — Net cash provided by (used in) financing activities 4,438 (26,184 ) 26,001 4,255 Net decrease in cash (2,306 ) (124 ) — (2,430 ) Cash, beginning of year 16,677 — — 16,677 Cash, end of year $ 14,371 $ (124 ) $ — $ 14,247 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 76,623 $ 13,247 $ (13,247 ) $ 76,623 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 21,570 3,023 — 24,593 Depreciation on rental equipment 178,371 30,082 — 208,453 Amortization of intangible assets 3,320 — — 3,320 Amortization of deferred financing costs 1,083 — — 1,083 Accretion of note discount, net of premium amortization 477 — — 477 Provision for losses on accounts receivable 2,065 676 — 2,741 Provision for inventory obsolescence 122 — — 122 Deferred income taxes 26,695 — — 26,695 Stock-based compensation expense 4,214 — — 4,214 Gain from sales of property and equipment, net (6,475 ) (643 ) — (7,118 ) Gain from sales of rental equipment, net (31,595 ) (6,757 ) — (38,352 ) Equity in earnings of guarantor subsidiaries (13,247 ) — 13,247 — Changes in operating assets and liabilities, net of acquisitions: Receivables (19,346 ) 1,585 — (17,761 ) Inventories (45,349 ) (2,881 ) — (48,230 ) Prepaid expenses and other assets (981 ) 16 — (965 ) Accounts payable 11,990 (4,996 ) — 6,994 Manufacturer flooring plans payable 2,878 (1,214 ) — 1,664 Accrued expenses payable and other liabilities 4,176 (1,604 ) — 2,572 Deferred compensation payable 86 — — 86 Net cash provided by operating activities 216,677 30,534 — 247,211 Cash flows from investing activities: Acquisition of business, net of cash acquired (196,027 ) — — (196,027 ) Purchases of property and equipment (26,903 ) (8,057 ) — (34,960 ) Purchases of rental equipment (362,780 ) (53,820 ) — (416,600 ) Proceeds from sales of property and equipment 8,617 644 — 9,261 Proceeds from sales of rental equipment 92,014 20,072 — 112,086 Investment in subsidiaries (10,845 ) — 10,845 — Net cash used in investing activities (495,924 ) (41,161 ) 10,845 (526,240 ) Cash flows from financing activities: Purchases of treasury stock (1,350 ) — — (1,350 ) Borrowings on senior secured credit facility 1,436,849 — — 1,436,849 Payments on senior secured credit facility (1,266,088 ) — — (1,266,088 ) Dividends paid (39,268 ) (6 ) — (39,274 ) Payments of deferred financing costs (97 ) — — (97 ) Payments of capital lease obligations — (212 ) — (212 ) Capital contributions — 10,845 (10,845 ) — Net cash provided by financing activities 130,046 10,627 (10,845 ) 129,828 Net decrease in cash (149,201 ) — — (149,201 ) Cash, beginning of year 165,878 — — 165,878 Cash, end of year $ 16,677 $ — $ — $ 16,677 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 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 2023 (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 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2019 | |
Valuation And Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | SCHEDULE II: VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2019, 2018 AND 2017 (Amounts in thousands) Description Balance at Beginning of Year Additions Charged to Costs and Expenses Deductions Balance at End of Year Year Ended December 31, 2019 Allowance for doubtful accounts receivable $ 4,094 $ 5,793 $ (4,651 ) $ 5,236 Allowance for inventory obsolescence 368 152 (189 ) 331 $ 4,462 $ 5,945 $ (4,840 ) $ 5,567 Year Ended December 31, 2018 Allowance for doubtful accounts receivable $ 3,774 $ 2,741 $ (2,421 ) $ 4,094 Allowance for inventory obsolescence 947 122 (701 ) 368 $ 4,721 $ 2,863 $ (3,122 ) $ 4,462 Year Ended December 31, 2017 Allowance for doubtful accounts receivable $ 3,769 $ 3,932 $ (3,927 ) $ 3,774 Allowance for inventory obsolescence 900 161 (114 ) 947 $ 4,669 $ 4,093 $ (4,041 ) $ 4,721 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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. Reclassifications and Comparability Prior period hauling revenues and related cost of revenues have been reclassified to conform to the current periods’ presentation. The tables below (amounts in thousands) reconcile for the years ended December 31, 2018 and 2017, our Revenues, Cost of Revenues and Gross Profit as previously reported to the current period presentation in this Annual Report on Form 10-K. Year Ended December 31, 2018 2017 As Previously Reported Reclassification of Hauling Fees As Currently Reported As Previously Reported Reclassification of Hauling Fees As Currently Reported Revenues: Equipment rentals $ 592,193 $ 34,988 $ 627,181 $ 479,016 $ 29,105 $ 508,121 New equipment sales 262,948 — 262,948 203,301 — 203,301 Used equipment sales 125,125 — 125,125 107,329 — 107,329 Parts sales 120,454 — 120,454 114,253 — 114,253 Services revenues 63,488 — 63,488 62,873 — 62,873 Other 74,753 (34,988 ) 39,765 63,247 (29,105 ) 34,142 Total revenues 1,238,961 — 1,238,961 1,030,019 — 1,030,019 Cost of revenues: Rental depreciation 208,453 — 208,453 169,455 — 169,455 Rental expense 89,520 — 89,520 77,706 — 77,706 Rental other — 55,449 55,449 — 47,438 47,438 297,973 55,449 353,422 247,161 47,438 294,599 New equipment sales 232,057 — 232,057 180,702 — 180,702 Used equipment sales 86,052 — 86,052 74,132 — 74,132 Parts sales 88,263 — 88,263 83,135 — 83,135 Services revenues 21,328 — 21,328 21,111 — 21,111 Other 74,754 (55,449 ) 19,305 63,870 (47,438 ) 16,432 Total cost of revenues 800,427 — 800,427 670,111 — 670,111 Gross profit $ 438,534 $ — $ 438,534 $ 359,908 $ — $ 359,908 |
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 Under Topic 606, Revenue from Contracts with Customers Leases, Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A performance obligation is a promise in a contract to transfer a distinct good or service to a customer. Our contracts with customers generally do not include multiple performance obligations. Nature of goods and services The tables below summarize our revenues as presented in our consolidated statements of income for the years ended December 31, 2019, 2018 and 2017 by revenue type and by the applicable accounting standard (amounts in thousands). Year Ended December 31, 2019 Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 668,087 $ 1,118 $ 669,205 Re-rent revenue 25,342 — 25,342 Ancillary and other rental revenues: Delivery and pick-up — 40,049 40,049 Other 31,758 — 31,758 Total ancillary rental revenues 31,758 40,049 71,807 Total equipment rental revenues 725,187 41,167 766,354 New equipment sales — 239,091 239,091 Used equipment sales — 139,349 139,349 Parts sales — 123,855 123,855 Services revenues — 67,941 67,941 Other — 11,775 11,775 Total revenues $ 725,187 $ 623,178 $ 1,348,365 Year Ended December 31, 2018 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 568,412 $ 1,334 $ 569,746 Re-rent revenue 22,447 — 22,447 Ancillary and other rental revenues: Delivery and pick-up — 34,988 34,988 Other — — — Total ancillary rental revenues — 34,988 34,988 Total equipment rental revenues 590,859 36,322 627,181 New equipment sales — 262,948 262,948 Used equipment sales — 125,125 125,125 Parts sales — 120,454 120,454 Services revenues — 63,488 63,488 Other 21,693 18,072 39,765 Total revenues $ 612,552 $ 626,409 $ 1,238,961 Year Ended December 31, 2017 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 459,571 $ 2,038 $ 461,609 Re-rent revenue 17,407 — 17,407 Ancillary and other rental revenues: Delivery and pick-up — 29,105 29,105 Other — — — Total ancillary rental revenues — 29,105 29,105 Total equipment rental revenues 476,978 31,143 508,121 New equipment sales — 203,301 203,301 Used equipment sales — 107,329 107,329 Parts sales — 114,253 114,253 Services revenues — 62,873 62,873 Other 17,791 16,351 34,142 Total revenues $ 494,769 $ 535,250 $ 1,030,019 (1) Prior to our adoption of Topic 842 on January 1, 2019, l eases were accounted for under Topic 840. See additional information below in Recently Adopted Accounting Pronouncements. Revenues by reporting segment are presented in note 18 of our condensed consolidated financial statements, using the revenue captions reflected in our consolidated statements of income. We believe that the disaggregation of our revenues from contracts to customers as reflected above, coupled with further discussion below and the reporting segment in note 18, depicts how the nature, amount, timing and uncertainty of our revenues and cash flows are affected by economic factors. Lease revenues Topic 842 Owned Equipment Rentals: Owned equipment rentals represent revenues from renting equipment. We account for these rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. Re-rent revenue: Re-rent revenue reflects revenues from equipment that we rent from vendors and then rent to our customers. We account for such rentals as subleases. The accounting for re-rent revenue is the same as the accounting for owned equipment rentals described above. Other equipment rental revenue : Other equipment rental revenue is primarily comprised of (i) revenue from customers who purchase insurance to protect against potential damages or loss the equipment they rent, (ii) environmental charges associated with the rental of equipment, and (iii) fuel recovery fees charged to customers. Fuel consumption charges are recognized upon return of the rental equipment when fuel consumption by the customer, if any, can be measured. Income from environmental fees and damage waiver insurance policies are recognized when earned over the period the equipment is rented. Topic 840 Rental Revenues: Owned equipment rentals represent revenues from renting equipment. We account for these rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. Other: Other rental revenues primarily represent services performed by us in connection with the rental of equipment to a customer, such as fuel consumption charges, environmental fees and damage waiver insurance. Fuel consumption charges are recognized upon return of the rental equipment when fuel consumption by the customer, if any, can be measured. Income from environmental fees and damage waiver insurance policies are recognized when earned over the period the equipment is rented . Revenues from contracts with customers (Topic 606) The accounting for the types of revenues accounted for pursuant to Topic 606 are discussed below. Substantially all of our revenues under Topic 606 are recognized at a point-in-time rather than over time. Rental revenues: An insignificant portion of our total equipment rental revenues are recognized pursuant to Topic 606 rather than pursuant to Topic 842. These revenues represent services performed by us in connection with the rental of equipment and are comprised of customer training fees on rented equipment and erection and dismantling services on rental equipment. Revenues for these services are recognized upon completion of such services. See discussion above regarding rental revenues recognized pursuant to Topic 842. Delivery and pick-up : Delivery and pick-up revenue associated with renting equipment is recognized when the service is performed. New equipment sales: Revenues from the sales of new equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Used equipment sales: Revenues from the sales of used equipment are recognized at the time of delivery to, or pick-up by, the customer, which is when the customer obtains control of the promised good. Parts sales: Revenues from the sales of equipment parts are recognized at the time of pick-up by the customer for parts counter sales transactions. For parts that are shipped to a customer, we made an accounting policy election permitted by Topic 606 to treat such shipping activities as fulfillment costs, which results in the fees for shipping activities being included in the parts sales transaction price. Services revenues: We derive our services primarily from maintenance and repair services to customers for their owned equipment. We recognize services revenues at the time such services are completed, which is when the customer obtains control of the promised service. Other revenues : Other revenues relate primarily to ancillary charges associated with equipment maintenance and repair services. Such revenues are recognized at the time the services are performed. Receivables and contract assets and liabilities We manage credit risk associated with our accounts receivables at the customer level. Because the same customers typically generate the revenues that are accounted for under both Topic 606 and Topic 842, the discussions below on credit risk and our allowances for doubtful accounts address our total revenues from Topic 606 and Topic 842. We believe concentration of credit risk with respect to our receivables is limited because our customer base is comprised of a large number of geographically diverse customers. Our largest customer accounted for less than two percent of total revenues for the years ended December 31, 2019, 2018 and 2017. No single customer accounted for more than 10% of our revenues on an overall or segment basis for any of the periods presented in this Annual Report on Form 10-K. We manage credit risk through credit approvals, credit limits and other monitoring procedures. We maintain an allowance for doubtful accounts that reflects our estimate of the amount of our receivables that we will be unable to collect. We develop our estimate of this allowance based on our historical experience with specific customers, our understanding of our current economic circumstances and our own judgment as to the likelihood of ultimate payment. Our largest exposure to doubtful accounts is in our rental operations. We perform credit evaluations of customers and establish credit limits based on reviews of our customers’ current credit information and payment histories. We believe our credit risk is somewhat mitigated by our geographically diverse customer base and our credit evaluation procedures. During the year, we write-off customer account balances when we have exhausted reasonable collection efforts and determined that the likelihood of collection is remote. Such write-offs are charged against our allowance for doubtful accounts. Bad debt expense as a percentage of total revenues for the years ended December 31, 2019, 2018 and 2017 were approximately 0.5%, 0.2% and 0.4%, respectively. See Pending Accounting Pronouncements for new guidance related to expected credit losses. We do not have material contract assets, impairment losses associated therewith, or material contract liabilities associated with contracts with customers. Our contracts with customers do not generally result in material amounts billed to customers in excess of recognizable revenue. We did not recognize material revenues during the years ended December 31, 2019, 2018 or 2017 that was included in the contract liability balance as of the beginning of such periods. Performance obligations Most of our Topic 606 revenue is recognized at a point-in-time, rather than over time. Accordingly, in any particular period, we do not generally recognize a significant amount of revenue from performance obligations satisfied (or partially satisfied) in previous periods, and the amount of such revenue recognized during the years ended December 31, 2019, 2018 and 2017 was not material. Payment terms Our Topic 606 revenues do not include material amounts of variable consideration. Our payment terms are typically net 30 days, but can vary by the type and location of our customer and the products or services offered. The time between invoicing and when payment is due is not significant. Our contracts do not generally include a significant financing component. Our contracts with customers do not generally result in significant obligations associated with returns, refunds or warranties. See above for a discussion of how we manage credit risk. Sales tax amounts collected from customers are recorded on a net basis. Contract costs We do not recognize any assets associated with the incremental costs of obtaining a contract with a customer (for example, a sales commission) that we expect to recover. Most of our revenue is recognized at a point-in-time or over a period of one year or less, and we use the practical expedient that allows us to recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that we otherwise would have recognized is one year or less. Contract estimates and judgments Our revenues accounted for under Topic 606 generally do not require significant estimates or judgments as the transaction price is generally fixed and stated on our contracts. Our contracts generally do not include multiple performance obligations, and accordingly do not generally require estimates of the standalone selling price for each performance obligation. Also, our revenues do not include material amounts of variable consideration. Substantially all of our revenues are recognized at a point-in-time and the timing of the satisfaction of the applicable performance obligations is readily determinable. As noted above, our Topic 606 revenues are generally recognized at the time of delivery to, or pick-up by, the customer. |
Inventories | Inventories We measure inventory at the lower of cost or net realizable value; where net realizable value is considered to be estimated selling price in the ordinary course of business, less reasonably predictable cost of completion, disposal and transportation. For new and used equipment inventories, cost is determined by specific-identification. For inventories of parts and supplies, cost is determined by using average cost. |
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 life of the equipment using the straight-line method. The depreciation is included in rental depreciation within our consolidated statements of income. 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. We additionally capitalize certain costs associated with internally developed software and cloud computing arrangements (see also Recently Adopted Accounting Pronouncements related to accounting guidance for cloud computing arrangements). 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, Depreciation expense on property and equipment is included in SG&A expenses on our consolidated statements of income. 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 When events or changes in circumstances indicate that the carrying amount of our rental fleet and property and equipment might not be recoverable, the expected future undiscounted cash flows from the assets are estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss is recorded. The impairment loss is measured by comparing the fair value of the assets with their carrying amounts. Fair value is determined based on discounted cash flows or appraised values, as appropriate. We did not record any impairment losses related to our rental equipment or property and equipment during 2019, 2018 or 2017. Goodwill We have made acquisitions in the past that included the recognition of goodwill. Goodwill is recorded as the excess of the consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair values of the identifiable net assets acquired. We evaluate goodwill for impairment at least annually, 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. Prior to our adoption of ASU No. 2017-04, described below, Topic 350 required a two-step assessment to determine whether goodwill is impaired. The first step (“Step 1”) requires an entity to compare each reporting unit’s carrying value, including goodwill, and its fair value. If the carrying value exceeds the fair value, then the entity must perform the second step (“Step 2”), which is to compare the implied fair value of goodwill to its carrying value, and record an impairment charge for any excess of carrying value over implied fair value. An entity also has an option to perform a qualitative assessment to determine if the quantitative impairment test is necessary. Considerable judgment is required by management in using the qualitative approach to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. During 2018, we performed, as of October 1, a qualitative assessment and determined that it was more likely than not that the fair value of each of our reporting units was not less than its carrying value and, therefore, did not perform the prescribed quantitative goodwill impairment test. We considered various factors in performing the qualitative test, including macroeconomic conditions, industry and market considerations, the overall financial performance of our reporting units, the Company’s stock price and the excess amount or “cushion” between our reporting unit’s fair value and carrying value as indicated on our most recent quantitative assessment. In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”) to simplify how all entities assess goodwill for impairment by eliminating Step 2 from the goodwill impairment test. As amended, the goodwill impairment test consists of one step, comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the total amount of goodwill allocated to the reporting unit. We adopted ASU 2017-04 as of October 1, 2019. Given that we have completed three acquisitions in 2018 and 2019, resulting in a substantial increase in the amount of goodwill, we performed a Step 1 quantitative assessment of goodwill impairment as of October 1, 2019, our annual impairment testing date. For all reporting units, we compared the carrying values of each reporting unit, inclusive of goodwill and definite-lived intangible assets, to its fair value. We estimated the fair value of these reporting units by weighting results from the income approach and the market approach. Based on this quantitative test, we determined that our Rental Component 1, Rental Component 2, Used Equipment Sales and Parts reporting units were not impaired as their respective fair values exceeded their respective carrying values by at least 24% or more. However, the results of the quantitative test indicated that the respective fair values of the New Equipment Sales and Service Revenues reporting units were less than the carrying value of each reporting unit, resulting in a goodwill impairment totaling $12.2 million, or $10.7 million and $1.5 million for the New Equipment Sales and Service Revenues reporting units, respectively. The New Equipment Sales reporting unit impairment was largely due to a sharp decline in our 2019 fourth quarter new equipment sales revenues as over 75% of our full-year new equipment sales decline occurred in the fourth quarter. This decline, combined with our new equipment sales revenues growth rate and operating results assumptions for the forecast period under the income approach, resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value as of October 1, 2019, resulting in a $10.7 million impairment charge. The impairment of the Service Revenues reporting unit was largely due to our service revenues growth rate and operating results assumptions for the forecast period under the income approach, which resulted in a fair value determination, that when combined with the weighted fair value of the reporting unit determined under the market approach, was less than the reporting unit’s carrying value as of October 1, 2019, resulting in a $1.5 million impairment charge. Significant assumptions inherent in the valuation methodologies for goodwill are employed and include, prospective financial information, growth rates, terminal value, discount rates, and comparable multiples from publicly traded companies in our industry. The inputs and variables used in determining the fair value of a reporting unit require management to make certain assumptions regarding the impact of operating and macroeconomic changes, as well as estimates of future cash flows. Our estimates regarding future cash flows are based on historical experience and projections of future operating performance, including revenues, margins and operating expenses. We also make certain forecasts about future economic conditions, such as the timing and duration of economic expansion or contraction cycles in our business, interest rates, and other market data. Many of the factors used in assessing fair value are outside the control of management, and these assumptions and estimates may change in future periods. The impairment charges are non-cash items and will not affect our cash flows, liquidity or borrowing capacity under the senior credit facility, and the charge is excluded from our financial results in evaluating our financial covenant under the senior secured credit facility. The changes in the carrying amount of goodwill for our reporting units for the years ended December 31, 2019 and 2018 were as follows (amounts in thousands): Eq. Rental Comp. 1 Eq. Rental Comp. 2 New Eq. Sales Used Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2017 $ — $ 18,700 $ — $ 6,137 $ 6,360 $ — $ 31,197 Increases (1) 34,297 23,836 10,434 2,324 2,550 1,205 74,646 Decreases — — — — — — — Balance at December 31, 2018 34,297 42,536 10,434 8,461 8,910 1,205 105,843 Increases (2) 14,918 19,775 254 500 2,045 291 37,783 Decreases (3) — — (10,688 ) — — (1,496 ) (12,184 ) Balance at December 31, 2019 $ 49,215 $ 62,311 $ — $ 8,961 $ 10,955 $ — $ 131,442 (1) Increases are related to goodwill recognized in the CEC and Rental Inc. 2018 acquisitions. See footnote 3 for further information (2) Increases are related to goodwill recognized in the WRI 2019 acquisition. See footnote 3 for further information (3) Decreases are related to the goodwill impairment calculated as of October 1, 2019. |
Intangible assets | Intangible assets Our intangible assets include customer relationships, tradenames and leasehold interests that we acquired in recent acquisitions (see note 3 for further acquisition information). The customer relationships, tradenames and leasehold interests are amortized on a straight-line basis over estimated useful lives of ten, one and ten years, respectively, from the date of acquisition. The gross carrying values, accumulated amortization and net carrying amounts of our major classes of intangible assets as of December 31, 2019 and 2018 are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 39,500 $ 6,729 $ 32,771 $ 31,000 $ 2,850 $ 28,150 Tradenames 200 183 17 500 450 50 Leasehold interests 200 40 160 200 20 180 Total $ 39,900 $ 6,952 $ 32,948 $ 31,700 $ 3,320 $ 28,380 Intangible assets are tested for impairment whenever events or circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized when the carrying amount of the asset exceeds the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition. The impairment loss to be recorded would be the excess of the asset’s carrying value over its fair value. Fair value is generally determined using a discounted cash flow analysis or other valuation technique. Total amortization expense for the years ended December 31, 2019 and 2018 totaled $4.1 million and $3.3 million, respectively, and is included within SG&A expenses on the consolidated statements of income. There was no amortization expense for the year ended December 31, 2017. The following table presents the expected amortization expense for each of the next five years ending December 31 and thereafter for those intangible assets with remaining carrying value as of December 31, 2019 (dollar amounts in thousands): Amortization Expense 2020 $ 3,987 2021 3,970 2022 3,970 2023 3,970 2024 3,970 Thereafter 13,081 $ 32,948 |
Leases | Leases The Company as Lessee We determine whether an arrangement is a lease at the inception of the arrangement based on the terms and conditions in the contract. A contract contains a lease if there is an identified asset and we have the right to control the asset for a period of time in exchange for consideration. Lease arrangements can take several forms. Some arrangements are clearly within the scope of lease accounting, such as a real estate contract that provides an explicit contractual right to use a building for a specified period of time in exchange for consideration. However, the right to use an asset can also be conveyed through arrangements that are not leases in form, such as leases embedded within service and supply contracts. We analyze all arrangements with potential embedded leases to determine if an identified asset is present, if substantive substitution rights are present, and if the arrangement provides the customer control of the asset. Our lease portfolio is substantially comprised of operating leases related to leases of real estate and improvements at our branch locations. From time to time, we may also lease various types of small equipment and vehicles. Operating lease right-of-use (“ROU”) assets represent our right to use an individual asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide the lessor’s implicit rate, we use our incremental borrowing rate (“IBR ” ) at the commencement date in determining the present value of lease payments by utilizing a fully collateralized rate for a fully amortizing loan with the same term as the lease. Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. For leases with terms greater than 12 months, we record the related asset and obligation at the present value of lease payments over the term. Many of our leases include rental escalation clauses, renewal options and/or termination options that are factored into our determination of lease payments when such renewal options and/or termination options are reasonably certain of exercise. We do not separate lease and non-lease components of contracts. Variable lease payments, which represent lease payments that vary due to changes in facts or circumstances occurring after the commencement date other than the passage of time, are expensed in the period in which the obligation for these payments was incurred. A ROU asset is subject to the same impairment guidance as assets categorized as plant, property, and equipment. As such, any impairment loss on ROU assets is presented in the same manner as an impairment loss recognized on other long-lived assets. A lease modification is a change to the terms and conditions of a contract that change the scope or consideration of a lease. For example, a change to the terms and conditions to the contract that adds or terminates the right to use one or more underlying assets, or extends or shortens the contractual lease term, is a modification. Depending on facts and circumstances, a lease modification may be accounted as either: (1) the original lease plus the lease of a separate asset(s) or (2) a modified lease. A lease will be remeasured if there are changes to the lease contract that do not give rise to a separate lease. See also Recently Adopted Accounting Pronouncements below regarding our adoption of the new lease accounting guidance as of January 1, 2019. Also see note 11 related to the required lease disclosures. The Company as Lessor Our equipment rental business involves rental contracts with customers whereby we are the lessor in the transaction and therefore, such transactions are subject to Topic 842. We account for such rental contracts as operating leases. We recognize revenue from equipment rentals in the period earned, regardless of the timing of billing to customers. A rental contract includes rates for daily, weekly or monthly use, and rental revenues are earned on a daily basis as rental contracts remain outstanding. Because the rental contracts can extend across multiple reporting periods, we record unbilled rental revenues and deferred rental revenues at the end of reporting periods so rental revenues earned is appropriately stated for the periods presented. |
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. 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, 2019, 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 $5.9 million and our health insurance reserves totaled $1.6 million. At December 31, 2018, our claims reserves related to workers compensation, general liability and automobile liability totaled $4.8 million and our health insurance reserves totaled $1.3 million. |
Advertising | Advertising Advertising costs are expensed as incurred and totaled $0.6 million, $0.5 million and $0.5 million for the years ended December 31, 2019, 2018 and 2017, respectively. |
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. 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. 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 carrying amounts and fair values of our other financial instruments subject to fair value disclosures as of December 31, 201 9 and 201 8 are presented in the table below (amounts in thousands) . December 31, 2019 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.25% (Level 3) $ 25,201 $ 21,615 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2) 945,566 995,125 December 31, 2018 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.50% (Level 3) $ 23,666 $ 19,870 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2) 944,780 871,625 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 726 330 At December 31, 2019 and 2018, the fair value of our senior unsecured notes due 2025 was based on quoted bond trading market prices for those notes. The carrying amounts and fair values of our other financial instruments subject to fair value disclosures have been calculated based upon market quotes and present value calculations based on market rates. See also Pending Accounting Pronouncements below for new guidance related to fair value disclosures. Fair Value Measurements on a Nonrecurring Basis Our non-financial assets, such as goodwill, intangible assets and property and equipment, are adjusted to fair value only when an impairment charge is recognized or the underlying investment is sold. Such fair value measurements are based predominately on Level 3 inputs. The results of our 2019 goodwill impairment quantitative test indicated that the respective fair values of the New Equipment Sales and Service Revenues reporting units were less than the carrying value of each reporting unit, resulting in a goodwill impairment totaling $12.2 million, or $10.7 million and $1.5 million for the New Equipment Sales and Service Revenues reporting units, respectively. See above for additional information. |
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, 2019, we purchased approximately 54% from five manufacturers (Grove/Manitowoc, Genie Industries (Terex), JCB, Komatsu, and John Deere) 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 years ended December 31, 2019, 2018 and 2017 is based on the weighted average number of common shares outstanding during the period. The effects of potentially dilutive securities that are anti-dilutive are not included in the computation of diluted 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 years ended December 31, 2019, 2018 and 2017 were less than 1% of total outstanding shares for each of the years ended December 31, 2019, 2018 and 2017 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, 2019, 2018 and 2017. 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): 2019 2018 2017 Basic net income per share: Net income $ 87,211 $ 76,623 $ 109,658 Weighted average number of common shares outstanding 35,859 35,677 35,516 Net income per common share — basic $ 2.43 $ 2.15 $ 3.09 Diluted net income per share: Net income $ 87,211 $ 76,623 $ 109,658 Weighted average number of common shares outstanding 35,859 35,677 35,516 Effect of dilutive securities: Effect of dilutive non-vested stock 174 226 183 Weighted average number of common shares outstanding — diluted 36,033 35,903 35,699 Net income per common share — diluted $ 2.42 $ 2.13 $ 3.07 Common shares excluded from the denominator as anti-dilutive: Non-vested stock 32 43 — |
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 1,645,414 shares of common stock as of December 31, 2019. We account for our stock-based compensation plans at fair value on the grant date, and recognize an expense over the requisite employee service period (generally the vesting period of the grant). 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, 2019 and 2018: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2018 445,964 $ 19.70 Granted 143,121 $ 37.10 Vested (181,194 ) $ 20.53 Forfeited (28,332 ) $ 19.61 Non-vested stock at December 31, 2018 379,559 $ 25.87 Granted 194,192 $ 30.20 Vested (161,615 ) $ 23.79 Forfeited (34,396 ) $ 22.90 Non-vested stock at December 31, 2019 377,740 $ 29.26 As of December 31, 2019, we had unrecognized compensation expense of approximately $6.4 million related to non-vested stock award payments that we expect to be recognized over a weighted average period of 2.0 years. Stock compensation expense for the years ended December 31, 2019, 2018 and 2017 was $4.7 million, $4.2 million and $3.5 million, respectively. |
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 five reportable segments. We derive our revenues from five principal business activities: (1) equipment rentals; (2) new equipment sales; (3) used equipment sales; (4) parts sales; and (5) repair and maintenance services. These segments are based upon how we allocate resources and assess performance. See note 18 to the consolidated financial statements regarding our segment information. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncements Not Yet Adopted In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This standard establishes an impairment model (known as the current expected credit loss (“CECL”) model) that is based on expected losses rather than incurred losses. Under the new guidance, an entity recognizes as an allowance its estimate of expected credit losses, which is intended to result in the more timely recognition of losses. Under the CECL model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications) from the date of initial recognition of the financial instrument. Measurement of expected credit losses are to be based on relevant forecasts that affect collectability. The scope of financial assets within the CECL methodology is broad and includes trade receivables from certain revenue transactions and certain off-balance sheet credit exposures. Different components of the guidance require modified retrospective or prospective adoption. In November 2018, the FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses. ASU 2018-19 clarifies that receivables arising from operating leases are not within the scope of the credit losses standard. Instead, entities would need to apply other U.S. GAAP, namely Topic 842 (Leases), to account for changes in the collectability assessment for operating leases. Other than operating lease receivables, our trade receivables include receivables from equipment sales, parts and service sales. Under Topic 606 (Revenue from Contracts with Customers), revenue is recognized when, among other criteria, it is probable that the entity will collect the consideration to which it is entitled for goods or services transferred to a customer. At the point that these trade receivables are recorded, they become subject to the CECL model and estimates of expected credit losses over their contractual life will be required to be recorded at inception based on historical information, current conditions, and reasonable and supportable forecasts. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments, which amends and clarifies several provisions of Topic 326. In May 2019, the FASB issued ASU 2019-05, Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief, which amends Topic 326 to allow the fair value option to be elected for certain financial instruments upon adoption. ASU 2016-13 became effective for us as of January 1, 2020. Based on our analysis of the new guidance, including the subsequent updates to Topic 326, we do not believe the adoption will have a material impact on our consolidated financial statements and related disclosures or our existing internal controls because our accounts receivable are of short duration and there is not a material difference between incurred losses and expected losses . In August 2018, the FASB issued ASU No. 2018-13, "Fair Value Measurement - Disclosure Framework," or ASU 2018-13. ASU 2018-13 modifies the disclosure requirements for fair value measurements. Entities will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but public companies will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements. The guidance is effective for all entities for fiscal years beginning after December 15, 2019 and for interim periods within those fiscal years, but entities were permitted to early adopt the entire standard or only the provisions that eliminate or modify the requirements. We will adopt ASU 2018-13 when effective. Based on our evaluation of ASU 2018-13, the adoption of ASU 2018-13 will not have a material impact on our consolidated financial statements and footnotes. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in Accounting Standards Codification (“ASC”) 740 related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies the accounting for transactions that result in a step-up in the tax basis of goodwill. ASU 2019-12 is effective for annual reporting periods, and interim periods therein, beginning after December 15, 2020, and generally requires prospective adoption. While we continue to evaluate the new guidance of ASU 2019-12, we currently do not expect the guidance to have a material impact on our consolidated financial statements. Recently Adopted Accounting Pronouncements Goodwill In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (“ASU 2017-04”), which removes Step 2 of the current goodwill impairment test, which was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of the reporting unit’s goodwill with the carrying amount of the goodwill. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognizing an impairment charge for the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of the reporting unit’s goodwill. We adopted ASU 2017-04 effective October 1, 2019 on a prospective basis. Our adoption of the new guidance coincided with our annual impairment testing date, see our previous disclosures in Significant Accounting Policies related to goodwill. Internal-Use Software In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other – Internal-Use Software (Subtopic 350-40). This update aligns the requirements for capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. Capitalized implementation costs related to a hosting arrangement that is a service contract will be amortized over the term of the hosting arrangement, beginning when the module or component of the hosting arrangement is ready for its intended use. The guidance is effective for calendar-year public business entities in 2020, with early adoption permitted. We adopted ASU 2018-15 effective October 1, 2019 on a prospective basis. Our adoption of the new guidance did not impact our consolidated financial statements. Leases We adopted Topic 842 on January 1, 2019. Topic 842 is an update to Topic 840, which was the lease accounting standard in effect through December 31, 2018. Topic 842 applies to us from both a lessor and a lessee perspective, as further described below. Lessor Accounting Our equipment rental business involves rental contracts with customers whereby we are the lessor in the transaction and therefore, we believe that such transactions are subject to Topic 842. We account for such rental contracts as operating leases pursuant to Topic 842, as well as pursuant to previous lease accounting guidance (Topic 840) in effect for periods prior to the effective date of Topic 842. In accordance with Topic 842, certain ancillary fees that we charge our equipment rental customers result in a different presentation within our consolidated statements of income compared to our historical presentation of those items under previous lease accounting guidance. Specifically, amounts we charge our customers for loss damage waiver fees, environmental fees, and fuel and other recovery fees, upon adoption of Topic 842, are to be included within our Equipment Rentals segment rather than included within non-segmented Other Revenues as we have historically presented those items under previous lease accounting guidance. Likewise, the related cost of revenues for these ancillary items under Topic 842 are to be presented within our Equipment Rentals segment rather than included in non-segmented Other Cost of Revenues as we have historically presented under previous lease accounting guidance. We adopted Topic 842 on January 1, 2019 using the transition method that allowed us to initially apply Topic 842 as of January 1, 2019 and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. As such, Topic 842 will not be applied to periods prior to January 1, 2019. Therefore, the above changes as described are not reflected in our consolidated statements of income for the years ended December 31, 2018 and 2017 in this Annual Report on Form 10-K. While the above changes resulting from our adoption of Topic 842 do not impact total consolidated revenues or total consolidated gross profit, the change does impact the comparability of our total Rental Revenues gross profit and total Other Revenues gross profit and resulting gross margins for 2019 compared to our previously reported gross profit and resulting gross margins for periods prior to January 1, 2019. Lessee Accounting Topic 842 requires leases with durations greater than twelve months to be recognized on the balance sheet. We adopted Topic 842 using the modified retrospective approach with an effective date as of the beginning of our fiscal year, January 1, 2019. Therefore, prior year financial statements were not recast under the new standard. We recognized an adjustment of less than $0.1 million to retained earnings upon adoption of Topic 842. We elected the package of transition provisions available for expired or existing leases, which allowed us to carryforward our historical assessments of (1) whether contracts are or contain leases, (2) lease classification and (3) initial direct costs. We did not elect the use-of-hindsight practical expedient or the practical expedient pertaining to land easements. We elected not to apply the recognition requirements of Topic 842 to arrangements with lease terms of 12 months or less. The adoption of Topic 842 had a material impact on our consolidated balance sheet related to operating leases. Upon adoption of Topic 842, we recognized additional operating lease liabilities of $162.8 million. We also recognized net corresponding right-of-use operating lease assets of $160.6 million. Finance lease liabilities recognized upon adoption of Topic 842 were $0.8 million and finance right-of-use lease assets were $0.5 million. Topic 842 significantly expanded the disclosure requirements related to our leasing activities. Additional information and disclosures required by Topic 842 are presented in note 11 to these consolidated financial statements . |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Revenues, Cost of Revenues and Gross Profit as Previously Reported | Year Ended December 31, 2018 2017 As Previously Reported Reclassification of Hauling Fees As Currently Reported As Previously Reported Reclassification of Hauling Fees As Currently Reported Revenues: Equipment rentals $ 592,193 $ 34,988 $ 627,181 $ 479,016 $ 29,105 $ 508,121 New equipment sales 262,948 — 262,948 203,301 — 203,301 Used equipment sales 125,125 — 125,125 107,329 — 107,329 Parts sales 120,454 — 120,454 114,253 — 114,253 Services revenues 63,488 — 63,488 62,873 — 62,873 Other 74,753 (34,988 ) 39,765 63,247 (29,105 ) 34,142 Total revenues 1,238,961 — 1,238,961 1,030,019 — 1,030,019 Cost of revenues: Rental depreciation 208,453 — 208,453 169,455 — 169,455 Rental expense 89,520 — 89,520 77,706 — 77,706 Rental other — 55,449 55,449 — 47,438 47,438 297,973 55,449 353,422 247,161 47,438 294,599 New equipment sales 232,057 — 232,057 180,702 — 180,702 Used equipment sales 86,052 — 86,052 74,132 — 74,132 Parts sales 88,263 — 88,263 83,135 — 83,135 Services revenues 21,328 — 21,328 21,111 — 21,111 Other 74,754 (55,449 ) 19,305 63,870 (47,438 ) 16,432 Total cost of revenues 800,427 — 800,427 670,111 — 670,111 Gross profit $ 438,534 $ — $ 438,534 $ 359,908 $ — $ 359,908 |
Summary of Revenues by Type and by Applicable Accounting Standard | The tables below summarize our revenues as presented in our consolidated statements of income for the years ended December 31, 2019, 2018 and 2017 by revenue type and by the applicable accounting standard (amounts in thousands). Year Ended December 31, 2019 Topic 842 Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 668,087 $ 1,118 $ 669,205 Re-rent revenue 25,342 — 25,342 Ancillary and other rental revenues: Delivery and pick-up — 40,049 40,049 Other 31,758 — 31,758 Total ancillary rental revenues 31,758 40,049 71,807 Total equipment rental revenues 725,187 41,167 766,354 New equipment sales — 239,091 239,091 Used equipment sales — 139,349 139,349 Parts sales — 123,855 123,855 Services revenues — 67,941 67,941 Other — 11,775 11,775 Total revenues $ 725,187 $ 623,178 $ 1,348,365 Year Ended December 31, 2018 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 568,412 $ 1,334 $ 569,746 Re-rent revenue 22,447 — 22,447 Ancillary and other rental revenues: Delivery and pick-up — 34,988 34,988 Other — — — Total ancillary rental revenues — 34,988 34,988 Total equipment rental revenues 590,859 36,322 627,181 New equipment sales — 262,948 262,948 Used equipment sales — 125,125 125,125 Parts sales — 120,454 120,454 Services revenues — 63,488 63,488 Other 21,693 18,072 39,765 Total revenues $ 612,552 $ 626,409 $ 1,238,961 Year Ended December 31, 2017 Topic 840 (1) Topic 606 Total Revenues: Rental revenues Owned equipment rentals $ 459,571 $ 2,038 $ 461,609 Re-rent revenue 17,407 — 17,407 Ancillary and other rental revenues: Delivery and pick-up — 29,105 29,105 Other — — — Total ancillary rental revenues — 29,105 29,105 Total equipment rental revenues 476,978 31,143 508,121 New equipment sales — 203,301 203,301 Used equipment sales — 107,329 107,329 Parts sales — 114,253 114,253 Services revenues — 62,873 62,873 Other 17,791 16,351 34,142 Total revenues $ 494,769 $ 535,250 $ 1,030,019 (1) Prior to our adoption of Topic 842 on January 1, 2019, l eases were accounted for under Topic 840. See additional information below in Recently Adopted Accounting Pronouncements. |
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 |
Schedule of Changes in Carrying Amount of Goodwill | The changes in the carrying amount of goodwill for our reporting units for the years ended December 31, 2019 and 2018 were as follows (amounts in thousands): Eq. Rental Comp. 1 Eq. Rental Comp. 2 New Eq. Sales Used Eq. Sales Parts Sales Service Revenues Total Balance at December 31, 2017 $ — $ 18,700 $ — $ 6,137 $ 6,360 $ — $ 31,197 Increases (1) 34,297 23,836 10,434 2,324 2,550 1,205 74,646 Decreases — — — — — — — Balance at December 31, 2018 34,297 42,536 10,434 8,461 8,910 1,205 105,843 Increases (2) 14,918 19,775 254 500 2,045 291 37,783 Decreases (3) — — (10,688 ) — — (1,496 ) (12,184 ) Balance at December 31, 2019 $ 49,215 $ 62,311 $ — $ 8,961 $ 10,955 $ — $ 131,442 (1) Increases are related to goodwill recognized in the CEC and Rental Inc. 2018 acquisitions. See footnote 3 for further information (2) Increases are related to goodwill recognized in the WRI 2019 acquisition. See footnote 3 for further information (3) Decreases are related to the goodwill impairment calculated as of October 1, 2019. |
Schedule of Gross Carrying Values, Accumulated Amortization and Net Carrying Amounts of Major Classes of Intangible Assets | The gross carrying values, accumulated amortization and net carrying amounts of our major classes of intangible assets as of December 31, 2019 and 2018 are as follows (dollar amounts in thousands): December 31, 2019 December 31, 2018 Gross Accumulated Amortization Net Gross Accumulated Amortization Net Customer relationships $ 39,500 $ 6,729 $ 32,771 $ 31,000 $ 2,850 $ 28,150 Tradenames 200 183 17 500 450 50 Leasehold interests 200 40 160 200 20 180 Total $ 39,900 $ 6,952 $ 32,948 $ 31,700 $ 3,320 $ 28,380 |
Schedule of Expected Amortization Expense of Intangible Assets with Remaining Carrying Value | The following table presents the expected amortization expense for each of the next five years ending December 31 and thereafter for those intangible assets with remaining carrying value as of December 31, 2019 (dollar amounts in thousands): Amortization Expense 2020 $ 3,987 2021 3,970 2022 3,970 2023 3,970 2024 3,970 Thereafter 13,081 $ 32,948 |
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, 201 9 and 201 8 are presented in the table below (amounts in thousands) . December 31, 2019 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.25% (Level 3) $ 25,201 $ 21,615 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2) 945,566 995,125 December 31, 2018 Carrying Amount Fair Value Manufacturer flooring plans payable with interest computed at 5.50% (Level 3) $ 23,666 $ 19,870 Senior unsecured notes due 2025 with interest computed at 5.625% (Level 2) 944,780 871,625 Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) 726 330 |
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): 2019 2018 2017 Basic net income per share: Net income $ 87,211 $ 76,623 $ 109,658 Weighted average number of common shares outstanding 35,859 35,677 35,516 Net income per common share — basic $ 2.43 $ 2.15 $ 3.09 Diluted net income per share: Net income $ 87,211 $ 76,623 $ 109,658 Weighted average number of common shares outstanding 35,859 35,677 35,516 Effect of dilutive securities: Effect of dilutive non-vested stock 174 226 183 Weighted average number of common shares outstanding — diluted 36,033 35,903 35,699 Net income per common share — diluted $ 2.42 $ 2.13 $ 3.07 Common shares excluded from the denominator as anti-dilutive: Non-vested stock 32 43 — |
Schedule of Non-Vested Stock Activity | The following table summarizes our non-vested stock activity for the years ended December 31, 2019 and 2018: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock at January 1, 2018 445,964 $ 19.70 Granted 143,121 $ 37.10 Vested (181,194 ) $ 20.53 Forfeited (28,332 ) $ 19.61 Non-vested stock at December 31, 2018 379,559 $ 25.87 Granted 194,192 $ 30.20 Vested (161,615 ) $ 23.79 Forfeited (34,396 ) $ 22.90 Non-vested stock at December 31, 2019 377,740 $ 29.26 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
We-Rent-It [Member] | |
Business Acquisition [Line Items] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. The amounts presented below should not significantly change upon settlement of the final closing statement in the first quarter of 2020. $’s in thousands Cash $ 1,745 Accounts receivable 5,119 Inventory 731 Prepaid expenses and other assets 544 Rental equipment 51,747 Property and equipment 3,207 Other assets 21 Intangible assets (1) 8,700 Total identifiable assets acquired 71,814 Accounts payable (115 ) Accrued expenses payable and other liabilities (991 ) Total liabilities assumed (1,106 ) Net identifiable assets acquired 70,708 Goodwill (2) 37,783 Net assets acquired $ 108,491 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 8,500 10 Tradenames 200 1 $ 8,700 (2) We have allocated the $37.8 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 14,918 Rental Component 2 19,775 New Equipment 254 Used Equipment 500 Parts 2,045 Service 291 $ 37,783 |
CEC [Member] | |
Business Acquisition [Line Items] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the estimated fair values of the assets acquired and liabilities assumed as of the acquisition date. $’s in thousands Cash $ 1,244 Accounts receivable 7,583 Inventory 504 Prepaid expenses and other assets 324 Rental equipment 55,342 Property and equipment 2,700 Intangible assets (1) 21,500 Total identifiable assets acquired 89,197 Accounts payable (1,023 ) Accrued expenses payable and other liabilities (876 ) Total liabilities assumed (1,899 ) Net identifiable assets acquired 87,298 Goodwill (2) 45,092 Net assets acquired $ 132,390 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 21,000 10 Tradenames 300 1 Leasehold interests 200 10 $ 21,500 (2) We have allocated the $45.1 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 25,233 Rental Component 2 18,391 New Equipment 217 Used Equipment 632 Parts 379 Service 240 $ 45,092 |
Rental Inc [Member] | |
Business Acquisition [Line Items] | |
Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair value of the assets acquired and liabilities assumed as of the acquisition date. $’s in thousands Cash $ 260 Accounts receivable 2,873 Inventory 5,324 Prepaid expenses and other assets 47 Rental equipment 22,578 Property and equipment 1,935 Intangible assets (1) 10,200 Total identifiable assets acquired 43,217 Accounts payable (439 ) Manufacturer flooring plans payable (3,293 ) Accrued expenses payable and other liabilities (469 ) Total liabilities assumed (4,201 ) Net identifiable assets acquired 39,016 Goodwill (2) 29,554 Net assets acquired $ 68,570 (1) The following table reflects the estimated fair values and useful lives of the acquired intangible assets identified based on our purchase accounting assessments: Fair Value (amounts in thousands) Life (years) Customer relationships $ 10,000 10 Tradenames 200 1 $ 10,200 (2) We have allocated the $29.6 million goodwill among our six goodwill reporting units as follows (amounts in thousands): Rental Component 1 $ 9,064 Rental Component 2 5,445 New Equipment 10,217 Used Equipment 1,692 Parts 2,171 Service 965 $ 29,554 |
CEC and Rental Inc [Member] | |
Business Acquisition [Line Items] | |
Unaudited Pro Forma Consolidated Statements of Income Information | The unaudited tables below present unaudited pro forma consolidated statements of income information for the year December 31, 2017 as if CEC and Rental Inc. were included in our consolidated results for the entire period presented. (amounts in thousands) Year Ended December 31, 2017 H&E(1) CEC Rental Inc. Total Total revenues $ 1,030,019 $ 36,790 $ 34,942 $ 1,101,751 Pretax income 59,344 3,043 7,267 69,654 Pro forma adjustments to pretax income: Impact of fair value mark-ups/useful life changes on depreciation (2) — (3,575 ) (2,794 ) (6,369 ) Intangible asset amortization (3) — (2,420 ) (1,200 ) (3,620 ) Interest expense (4) — — (1,609 ) (1,609 ) Elimination of merger related costs 788 4,497 — 5,285 Elimination of historic interest expense (5) — 1,966 382 2,348 Pro forma pretax income 60,132 3,511 2,046 65,689 Income tax expense (50,511 ) (2,949 ) (1,719 ) (55,179 ) Net income $ 110,643 $ 6,460 $ 3,765 $ 120,868 Net income per share – basic (6) $ 3.12 $ 0.18 $ 0.11 $ 3.40 Net income per share – diluted (6) $ 3.10 $ 0.18 $ 0.11 $ 3.39 (1) Amounts presented above for “H&E” are derived from the Company’s consolidated statement of income in this Annual Report on Form 10-K for the year ended December 31, 2017. (2) Depreciation of rental equipment and non-rental equipment were adjusted for the fair value markups, and the changes in useful lives and salvage values of the equipment acquired in the acquisitions. (3) Represents the amortization of the intangible assets acquired in the acquisitions. (4) A portion of the consideration paid for Rental Inc. was funded with borrowings from our Credit Facility. Interest expense was adjusted to reflect the additional debt resulting from such acquisition. (5) Represents the elimination of historic debt of CEC and Rental Inc. that is not part of the combined entity. (6) Because of the method used in calculating per share data, the summation of entities may not necessarily total to the per share data computed for the total company due to rounding. The pro forma information below gives effect to the Rental Inc. and WRI acquisitions as if they had been completed on January 1, 2018 (the “pro forma acquisition date”). The pro forma information is not necessarily indicative of our results of operations had the acquisitions been completed on the above date, nor is it necessarily indicative of our future results. The pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition s , nor does it reflect additional revenue opportunities following the acquisition s . The unaudited tables below present unaudited pro forma consolidated statements of income informatio n for the year December 31, 2018 as if Rental Inc. and WRI were included in our consolidated results for the entire period presented. (amounts in thousands, except per share data) Year Ended December 31, 2018 H&E(1) Rental Inc.(7) We-Rent-It Total Total revenues $ 1,238,961 $ 7,408 $ 36,002 $ 1,282,371 Pretax income 104,663 1,020 6,892 112,575 Pro forma adjustments to pretax income: Impact of fair value mark-ups/useful life changes on depreciation (2) — (749 ) (4,452 ) (5,201 ) Intangible asset amortization (3) — (300 ) (1,050 ) (1,350 ) Interest expense (4) — (480 ) (5,664 ) (6,144 ) Elimination of historic interest expense (5) — 82 517 599 Pro forma pretax income (loss) 104,663 (427 ) (3,757 ) 100,479 Income tax expense (benefit) 28,040 (114 ) (973 ) 26,953 Net income (loss) $ 76,623 $ (313 ) $ (2,784 ) $ 73,526 Net income (loss) per share – basic (6) $ 2.15 $ (0.01 ) $ (0.08 ) $ 2.05 Net income (loss) per share – diluted (6) $ 2.13 $ (0.01 ) $ (0.08 ) $ 2.04 (1) Amounts presented above for “H&E” are derived from the Company’s consolidated statement of income in this Annual Report on Form 10-K for the year ended December 31, 2018 and includes actual results for CEC for the full twelve months ended December 31, 2018 and actual results for Rental Inc. for the period April 1, 2018 through December 31, 2018. (2) Depreciation of rental equipment and non-rental equipment were adjusted for the fair value markups, and the changes in useful lives and salvage values of the equipment acquired in the acquisitions. (3) Represents the amortization of the intangible assets acquired in the acquisitions. (4) Interest expense was adjusted to reflect the additional debt resulting from the acquisition. (5) Represents the elimination of historic debt of Rental Inc. and WRI that is not part of the combined entity. (6) Because of the method used in calculating per share data, the summation of entities may not necessarily total to the per share data computed for the total company due to rounding. (7) Represents Rental Inc. pro forma operating results for the three month period ended March 31, 2018. We completed the Rental Inc. acquisition effective April 1, 2018. |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Receivables | Receivables consisted of the following at December 31, (amounts in thousands): 2019 2018 Trade receivables $ 186,472 $ 194,601 Unbilled rental revenue 9,529 8,833 Income tax receivables 1,405 2,181 Other 34 35 197,440 205,650 Less allowance for doubtful accounts (5,236 ) (4,094 ) Total receivables, net $ 192,204 $ 201,556 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories consisted of the following at December 31, (amounts in thousands): 2019 2018 New equipment $ 65,549 $ 84,603 Used equipment 1,993 1,980 Parts, supplies and other 17,936 18,015 Total inventories, net $ 85,478 $ 104,598 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): 2019 2018 Land $ 7,597 $ 7,597 Transportation equipment 130,099 106,011 Building and leasehold improvements 69,031 63,060 Office and computer equipment 53,597 51,758 Machinery and equipment 18,732 17,811 Property under capital leases — 2,417 Construction in progress 8,290 9,129 287,346 257,783 Less accumulated depreciation and amortization (156,782 ) (142,662 ) Total net property and equipment $ 130,564 $ 115,121 |
Manufacturer Flooring Plans P_2
Manufacturer Flooring Plans Payable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 for the following years ending December 31 until paid are as follows (amounts in thousands): 2020 $ 11,658 2021 13,369 2022 174 Total $ 25,201 |
Accrued Expenses Payable and _2
Accrued Expenses Payable and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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): 2019 2018 Payroll and related liabilities $ 30,903 $ 24,864 Sales, use and property taxes 11,042 10,069 Accrued interest 18,804 18,771 Accrued insurance 5,837 4,328 Deferred revenue 4,038 5,973 Other 7,758 9,366 Total accrued expenses payable and other liabilities $ 78,382 $ 73,371 |
Senior Unsecured Notes (Tables)
Senior Unsecured Notes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2017 $ 944,088 Accretion of discount through December 31, 2018 1,539 Amortization of note premium through December 31, 2018 (1,062 ) Additional deferred financing costs on New Notes (97 ) Amortization of deferred financing costs through December 31, 2018 312 Balance at December 31, 2018 $ 944,780 Accretion of discount through December 31, 2019 1,539 Amortization of note premium through December 31, 2019 (1,062 ) Additional deferred financing costs on New Notes — Amortization of deferred financing costs through December 31, 2019 309 Balance at December 31, 2019 $ 945,566 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Summary of Lease Costs, Under Topic 842, for Operating and Finance Leases | The table below presents certain information related to lease costs, under Topic 842, for our operating and finance leases for the years ended December 31, (in thousands). Classification Year Ended December 31, 2019 Operating lease cost SG&A expenses $ 22,293 Finance lease costs Amortization of leased assets SG&A expenses 162 Interest on lease liabilities Interest expense 39 Variable lease cost SG&A expenses 523 Sublease income Other income (567 ) Total lease cost $ 22,450 |
Schedule of Supplemental Cash Flow Information Related to Leases | The table below presents supplemental cash flow information related to leases for the year ended December 31, 2019 (in thousands). Year Ended December 31, 2019 Cash paid for amounts included in the measurements of lease liabilities: Operating cash flows for operating leases $ 21,720 Operating cash flows for finance leases 39 Finance cash flows for finance leases 232 |
Summary of Undiscounted Cash Flows and Operating Lease Liabilities Recorded on Consolidated Balance Sheet | The table below reconciles the undiscounted cash flows for each of the first five years and total of the remaining years to the operating lease liabilities recorded on our consolidated balance sheet as of December 31, 2019 (in thousands). Operating Leases Finance Leases 2020 $ 21,697 $ 270 2021 21,672 270 2022 21,508 45 2023 21,506 — 2024 21,740 — Thereafter 114,792 — Total minimum lease payments 222,915 585 Less: amount of lease payments representing interest (63,650 ) (35 ) Present value of future minimum lease payments $ 159,265 $ 550 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) | Our income tax provision (benefit) for the years ended December 31, 2019, 2018 and 2017, consists of the following (amounts in thousands): Current Deferred Total Year ended December 31, 2019: U.S. Federal $ (761 ) $ 25,134 $ 24,373 State 2,398 1,879 4,277 $ 1,637 $ 27,013 $ 28,650 Year ended December 31, 2018: U.S. Federal $ (1,523 ) $ 23,127 $ 21,604 State 2,868 3,568 6,436 $ 1,345 $ 26,695 $ 28,040 Year ended December 31, 2017: U.S. Federal $ — $ (54,241 ) $ (54,241 ) State 221 3,706 3,927 $ 221 $ (50,535 ) $ (50,314 ) |
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): 2019 2018 Deferred tax assets: Accounts receivable $ 1,283 $ 1,010 Inventories 83 93 Net operating losses 101,212 86,859 AMT and tax credits 1,334 2,110 Sec 263A costs 608 752 Accrued liabilities 2,970 2,869 Deferred compensation 1,499 1,561 Accrued interest 410 387 Stock-based compensation 247 146 Goodwill and intangible assets 711 346 Other assets 597 415 110,954 96,548 Valuation allowance — (609 ) 110,954 95,939 Deferred tax liabilities: Property and equipment (287,654 ) (245,198 ) Investments (1,072 ) (1,076 ) Goodwill and intangible assets (2,354 ) (2,778 ) (291,080 ) (249,052 ) Net deferred tax liabilities $ (180,126 ) $ (153,113 ) |
Actual Income Tax Expense (Benefit) | The reconciliation between income taxes computed using the statutory federal income tax rate (21% for the years ended December 31, 2019 and 2018 and 35% for the year ended December 31, 2017) to the actual income tax expense (benefit) is below (amounts in thousands): 2019 2018 2017 Computed tax at statutory rates $ 24,331 $ 21,979 $ 20,770 Permanent items - other 1,065 1,021 911 Permanent items - excess of tax deductible goodwill — — (2,130 ) State income tax, net of federal tax effect 6,944 5,246 2,563 Change in valuation allowance (609 ) (123 ) 397 Change in uncertain tax positions — (83 ) (5,960 ) Other - change in deferred state rate (3,081 ) — — Impact of the Act federal rate change — — (66,865 ) $ 28,650 $ 28,040 $ (50,314 ) |
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): 2019 2018 Gross unrecognized tax benefits at January 1 $ — $ 106 Increases in tax positions taken in prior years — — Decreases in tax positions taken in prior years — (106 ) Lapse in statute of limitations — — Gross unrecognized tax benefits at December 31 $ — $ — |
Summarized Quarterly Financia_2
Summarized Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 and 2018 (amounts in thousands, except per share amounts): First Quarter Second Quarter Third Quarter Fourth Quarter 2019: Total revenues $ 313,638 $ 333,597 $ 352,997 $ 348,133 Income from operations (1) 35,675 47,673 55,503 41,310 Income before provision for income taxes (1) 19,352 30,895 38,760 26,854 Net income (1) 14,243 22,614 28,431 21,923 Basic net income per common share (2) $ 0.40 $ 0.63 $ 0.79 $ 0.61 Diluted net income per common share (2) $ 0.40 $ 0.63 $ 0.79 $ 0.61 First Quarter Second Quarter Third Quarter Fourth Quarter 2018: Total revenues $ 260,482 $ 310,364 $ 322,141 $ 345,974 Income from operations 27,326 43,103 45,318 50,899 Income before provision for income taxes 13,068 27,869 28,971 34,755 Net income 9,478 20,771 21,314 25,060 Basic net income per common share (2) $ 0.27 $ 0.58 $ 0.60 $ 0.70 Diluted net income per common share (2) $ 0.26 $ 0.58 $ 0.59 $ 0.70 (1) During the quarter ended December 31, 2019, we recorded non-cash impairment charge totaling approximately $12.2 million, or $9.9 million after-tax, related to the impairment of goodwill. See note 2 to the consolidated financial statements for additional information. ( 2 ) Because of the method used in calculating per share data, the summation of quarterly per share data may not necessarily total to the per share data computed for the entire year due to rounding. |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 2017 Segment Revenues: Equipment rentals $ 766,354 $ 627,181 $ 508,121 New equipment sales 239,091 262,948 203,301 Used equipment sales 139,349 125,125 107,329 Parts sales 123,855 120,454 114,253 Services revenues 67,941 63,488 62,873 Total segmented revenues 1,336,590 1,199,196 995,877 Non-Segmented revenues 11,775 39,765 34,142 Total revenues $ 1,348,365 $ 1,238,961 $ 1,030,019 Segment Gross Profit: Equipment rentals $ 346,882 $ 273,759 $ 213,522 New equipment sales 27,719 30,891 22,599 Used equipment sales 47,328 39,073 33,197 Parts sales 32,892 32,191 31,118 Services revenues 45,995 42,160 41,762 Total gross profit from segmented revenues 500,816 418,074 342,198 Non-Segmented gross profit (loss) (1,646 ) 20,460 17,710 Total gross profit $ 499,170 $ 438,534 $ 359,908 December 31, 2019 2018 Segment identified assets: Equipment sales $ 67,542 $ 86,583 Equipment rentals 1,217,673 1,141,498 Parts and service 17,936 18,015 Total segment identified assets 1,303,151 1,246,096 Non-Segmented identified assets 671,459 481,085 Total assets $ 1,974,610 $ 1,727,181 |
Consolidating Financial Infor_2
Consolidating Financial Information of Guarantor Subsidiaries (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Condensed Consolidating Balance Sheet | CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 14,247 $ — $ — $ 14,247 Receivables, net 164,260 27,944 — 192,204 Inventories, net 81,945 3,533 — 85,478 Prepaid expenses and other assets 10,129 133 — 10,262 Rental equipment, net 1,062,154 155,519 — 1,217,673 Property and equipment, net 111,429 19,135 — 130,564 Operating lease right-of-use assets, net 137,625 18,945 — 156,570 Finance lease right-of-use assets, net — 365 — 365 Deferred financing costs, net 2,857 — — 2,857 Investment in guarantor subsidiaries 235,749 — (235,749 ) — Intangible assets, net 32,948 — — 32,948 Goodwill 101,916 29,526 — 131,442 Total assets $ 1,955,259 $ 255,100 $ (235,749 ) $ 1,974,610 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility 216,879 $ — $ — $ 216,879 Accounts payable 56,225 2,628 — 58,853 Manufacturer flooring plans payable 25,201 — — 25,201 Accrued expenses payable and other liabilities 81,646 (3,264 ) — 78,382 Dividends payable 231 (60 ) — 171 Senior unsecured notes, net 945,566 — — 945,566 Operating lease right-of-use liabilities 139,768 19,497 — 159,265 Finance lease right-of-use liabilities — 550 — 550 Deferred income taxes 180,126 — — 180,126 Deferred compensation payable 2,098 — — 2,098 Total liabilities 1,647,740 19,351 — 1,667,091 Stockholders’ equity 307,519 235,749 (235,749 ) 307,519 Total liabilities and stockholders’ equity $ 1,955,259 $ 255,100 $ (235,749 ) $ 1,974,610 CONDENSED CONSOLIDATING BALANCE SHEET As of December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Assets: Cash $ 16,677 $ — $ — $ 16,677 Receivables, net 166,393 35,163 — 201,556 Inventories, net 94,483 10,115 — 104,598 Prepaid expenses and other assets 10,382 126 — 10,508 Rental equipment, net 983,281 158,217 — 1,141,498 Property and equipment, net 98,251 16,870 — 115,121 Deferred financing costs, net 3,000 — — 3,000 Investment in guarantor subsidiaries 246,309 — (246,309 ) — Intangible assets, net 28,380 — — 28,380 Goodwill 76,317 29,526 — 105,843 Total assets $ 1,723,473 $ 250,017 $ (246,309 ) $ 1,727,181 Liabilities and Stockholders’ Equity: Amount due on senior secured credit facility $ 170,761 $ — $ — $ 170,761 Accounts payable 95,866 5,974 — 101,840 Manufacturer flooring plans payable 23,178 488 — 23,666 Accrued expenses payable and other liabilities 76,798 (3,427 ) — 73,371 Dividends payable 185 (53 ) — 132 Senior unsecured notes, net 944,780 — — 944,780 Capital leases payable — 726 — 726 Deferred income taxes 153,113 — — 153,113 Deferred compensation payable 1,989 — — 1,989 Total liabilities 1,466,670 3,708 — 1,470,378 Stockholders’ equity 256,803 246,309 (246,309 ) 256,803 Total liabilities and stockholders’ equity $ 1,723,473 $ 250,017 $ (246,309 ) $ 1,727,181 |
Condensed Consolidating Statement of Income | CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 662,578 $ 103,776 $ — $ 766,354 New equipment sales 213,877 25,214 — 239,091 Used equipment sales 118,504 20,845 — 139,349 Parts sales 107,160 16,695 — 123,855 Services revenues 57,835 10,106 — 67,941 Other 9,854 1,921 — 11,775 Total revenues 1,169,808 178,557 — 1,348,365 Cost of revenues: Rental depreciation 211,252 32,528 — 243,780 Rental expense 90,485 14,594 — 105,079 Rental other 59,543 11,070 — 70,613 361,280 58,192 — 419,472 New equipment sales 189,045 22,327 — 211,372 Used equipment sales 78,703 13,318 — 92,021 Parts sales 79,196 11,767 — 90,963 Services revenues 18,870 3,076 — 21,946 Other 11,807 1,614 — 13,421 Total cost of revenues 738,901 110,294 — 849,195 Gross profit (loss): Equipment rentals 301,298 45,584 — 346,882 New equipment sales 24,832 2,887 — 27,719 Used equipment sales 39,801 7,527 — 47,328 Parts sales 27,964 4,928 — 32,892 Services revenues 38,965 7,030 — 45,995 Other (1,953 ) 307 — (1,646 ) Gross profit 430,907 68,263 — 499,170 Selling, general and administrative expenses 270,533 40,493 — 311,026 Impairment of goodwill 12,184 — — 12,184 Equity in earnings of guarantor subsidiaries 15,441 — (15,441 ) — Merger costs 416 — — 416 Gain from sales of property and equipment, net 3,957 660 — 4,617 Income from operations 167,172 28,430 (15,441 ) 180,161 Other income (expense): Interest expense (55,056 ) (13,221 ) — (68,277 ) Other, net 3,745 232 — 3,977 Total other expense, net (51,311 ) (12,989 ) — (64,300 ) Income before provision for income taxes 115,861 15,441 (15,441 ) 115,861 Provision for income taxes 28,650 — — 28,650 Net income $ 87,211 $ 15,441 $ (15,441 ) $ 87,211 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 535,551 $ 91,630 $ — $ 627,181 New equipment sales 207,564 55,384 — 262,948 Used equipment sales 102,005 23,120 — 125,125 Parts sales 103,586 16,868 — 120,454 Services revenues 53,534 9,954 — 63,488 Other 33,702 6,063 — 39,765 Total revenues 1,035,942 203,019 — 1,238,961 Cost of revenues: Rental depreciation 178,371 30,082 — 208,453 Rental expense 76,487 13,033 — 89,520 Rental other 46,039 9,410 — 55,449 300,897 52,525 — 353,422 New equipment sales 183,164 48,893 — 232,057 Used equipment sales 69,960 16,092 — 86,052 Parts sales 76,425 11,838 — 88,263 Services revenues 18,100 3,228 — 21,328 Other 16,706 2,599 — 19,305 Total cost of revenues 665,252 135,175 — 800,427 Gross profit (loss): Equipment rentals 234,654 39,105 — 273,759 New equipment sales 24,400 6,491 — 30,891 Used equipment sales 32,045 7,028 — 39,073 Parts sales 27,161 5,030 — 32,191 Services revenues 35,434 6,726 — 42,160 Other 16,996 3,464 — 20,460 Gross profit 370,690 67,844 — 438,534 Selling, general and administrative expenses 232,892 45,406 — 278,298 Equity in earnings of guarantor subsidiaries 13,247 — (13,247 ) — Merger costs 708 — — 708 Gain from sales of property and equipment, net 6,475 643 — 7,118 Income from operations 156,812 23,081 (13,247 ) 166,646 Other income (expense): Interest expense (53,681 ) (10,026 ) — (63,707 ) Other, net 1,532 192 — 1,724 Total other expense, net (52,149 ) (9,834 ) — (61,983 ) Income before provision for income taxes 104,663 13,247 (13,247 ) 104,663 Provision for income taxes 28,040 — — 28,040 Net income $ 76,623 $ 13,247 $ (13,247 ) $ 76,623 CONDENSED CONSOLIDATING STATEMENT OF INCOME Year Ended December 31, 2017 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Revenues: Equipment rentals $ 418,769 $ 89,352 $ — $ 508,121 New equipment sales 166,730 36,571 — 203,301 Used equipment sales 84,741 22,588 — 107,329 Parts sales 97,852 16,401 — 114,253 Services revenues 52,807 10,066 — 62,873 Other 28,133 6,009 — 34,142 Total revenues 849,032 180,987 — 1,030,019 Cost of revenues: Rental depreciation 140,489 28,966 — 169,455 Rental expense 64,598 13,108 — 77,706 Rental other 38,228 9,210 — 47,438 243,315 51,284 — 294,599 New equipment sales 148,163 32,539 — 180,702 Used equipment sales 59,481 14,651 — 74,132 Parts sales 71,603 11,532 — 83,135 Services revenues 17,851 3,260 — 21,111 Other 13,840 2,592 — 16,432 Total cost of revenues 554,253 115,858 — 670,111 Gross profit (loss): Equipment rentals 175,454 38,068 — 213,522 New equipment sales 18,567 4,032 — 22,599 Used equipment sales 25,260 7,937 — 33,197 Parts sales 26,249 4,869 — 31,118 Services revenues 34,956 6,806 — 41,762 Other 14,293 3,417 — 17,710 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 fees, 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 Cash Flows | CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2019 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 87,211 $ 15,441 $ (15,441 ) $ 87,211 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 25,058 3,367 — 28,425 Depreciation on rental equipment 211,252 32,528 — 243,780 Amortization of intangible assets 4,132 — — 4,132 Amortization of deferred financing costs 1,010 — — 1,010 Accretion of note discount, net of premium amortization 477 — — 477 Non-cash operating lease expense 10,306 1,374 — 11,680 Amortization of finance lease right-of-use assets — 163 — 163 Provision for losses on accounts receivable 5,382 411 — 5,793 Provision for inventory obsolescence 152 — — 152 Deferred income taxes 27,013 — — 27,013 Impairment of goodwill 12,184 — — 12,184 Stock-based compensation expense 4,670 — — 4,670 Gain from sales of property and equipment, net (3,957 ) (660 ) — (4,617 ) Gain from sales of rental equipment, net (39,102 ) (7,511 ) — (46,613 ) Equity in earnings of guarantor subsidiaries (15,441 ) — 15,441 — Changes in operating assets and liabilities, net of acquisitions: Receivables 2,414 6,808 — 9,222 Inventories (21,121 ) 1,484 — (19,637 ) Prepaid expenses and other assets 274 (7 ) — 267 Accounts payable (40,012 ) (3,346 ) — (43,358 ) Manufacturer flooring plans payable 2,023 (488 ) — 1,535 Accrued expenses payable and other liabilities (3,597 ) (783 ) — (4,380 ) Deferred compensation payable 109 — — 109 Net cash provided by operating activities 270,437 48,781 — 319,218 Cash flows from investing activities: Acquisition of business, net of cash acquired (106,746 ) — — (106,746 ) Purchases of property and equipment (36,824 ) (6,287 ) — (43,111 ) Purchases of rental equipment (272,015 ) (37,639 ) — (309,654 ) Proceeds from sales of property and equipment 5,276 774 — 6,050 Proceeds from sales of rental equipment 107,127 20,431 — 127,558 Investment in subsidiaries 26,001 — (26,001 ) — Net cash used in investing activities (277,181 ) (22,721 ) (26,001 ) (325,903 ) Cash flows from financing activities: Purchases of treasury stock (1,684 ) — — (1,684 ) Borrowings on senior secured credit facility 1,457,744 — — 1,457,744 Payments on senior secured credit facility (1,411,626 ) — — (1,411,626 ) Dividends paid (39,381 ) (7 ) — (39,388 ) Payments of deferred financing costs (559 ) — — (559 ) Payments of finance lease obligations (56 ) (176 ) — (232 ) Capital contributions — (26,001 ) 26,001 — Net cash provided by (used in) financing activities 4,438 (26,184 ) 26,001 4,255 Net decrease in cash (2,306 ) (124 ) — (2,430 ) Cash, beginning of year 16,677 — — 16,677 Cash, end of year $ 14,371 $ (124 ) $ — $ 14,247 CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS Year Ended December 31, 2018 H&E Equipment Services Guarantor Subsidiaries Elimination Consolidated (Amounts in thousands) Cash flows from operating activities: Net income $ 76,623 $ 13,247 $ (13,247 ) $ 76,623 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization on property and equipment 21,570 3,023 — 24,593 Depreciation on rental equipment 178,371 30,082 — 208,453 Amortization of intangible assets 3,320 — — 3,320 Amortization of deferred financing costs 1,083 — — 1,083 Accretion of note discount, net of premium amortization 477 — — 477 Provision for losses on accounts receivable 2,065 676 — 2,741 Provision for inventory obsolescence 122 — — 122 Deferred income taxes 26,695 — — 26,695 Stock-based compensation expense 4,214 — — 4,214 Gain from sales of property and equipment, net (6,475 ) (643 ) — (7,118 ) Gain from sales of rental equipment, net (31,595 ) (6,757 ) — (38,352 ) Equity in earnings of guarantor subsidiaries (13,247 ) — 13,247 — Changes in operating assets and liabilities, net of acquisitions: Receivables (19,346 ) 1,585 — (17,761 ) Inventories (45,349 ) (2,881 ) — (48,230 ) Prepaid expenses and other assets (981 ) 16 — (965 ) Accounts payable 11,990 (4,996 ) — 6,994 Manufacturer flooring plans payable 2,878 (1,214 ) — 1,664 Accrued expenses payable and other liabilities 4,176 (1,604 ) — 2,572 Deferred compensation payable 86 — — 86 Net cash provided by operating activities 216,677 30,534 — 247,211 Cash flows from investing activities: Acquisition of business, net of cash acquired (196,027 ) — — (196,027 ) Purchases of property and equipment (26,903 ) (8,057 ) — (34,960 ) Purchases of rental equipment (362,780 ) (53,820 ) — (416,600 ) Proceeds from sales of property and equipment 8,617 644 — 9,261 Proceeds from sales of rental equipment 92,014 20,072 — 112,086 Investment in subsidiaries (10,845 ) — 10,845 — Net cash used in investing activities (495,924 ) (41,161 ) 10,845 (526,240 ) Cash flows from financing activities: Purchases of treasury stock (1,350 ) — — (1,350 ) Borrowings on senior secured credit facility 1,436,849 — — 1,436,849 Payments on senior secured credit facility (1,266,088 ) — — (1,266,088 ) Dividends paid (39,268 ) (6 ) — (39,274 ) Payments of deferred financing costs (97 ) — — (97 ) Payments of capital lease obligations — (212 ) — (212 ) Capital contributions — 10,845 (10,845 ) — Net cash provided by financing activities 130,046 10,627 (10,845 ) 129,828 Net decrease in cash (149,201 ) — — (149,201 ) Cash, beginning of year 165,878 — — 165,878 Cash, end of year $ 16,677 $ — $ — $ 16,677 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 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 2023 (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 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Summary of Revenues, Cost of Revenues and Gross Profit as Previously Reported (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
Cost of revenues: | |||||||||||
Cost of revenues | 849,195 | 800,427 | 670,111 | ||||||||
Gross profit | 499,170 | 438,534 | 359,908 | ||||||||
As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,238,961 | 1,030,019 | |||||||||
Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,238,961 | 1,030,019 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 800,427 | 670,111 | |||||||||
Gross profit | 438,534 | 359,908 | |||||||||
Equipment Rentals [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 627,181 | 508,121 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 353,422 | 294,599 | |||||||||
Equipment Rentals [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 592,193 | 479,016 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 297,973 | 247,161 | |||||||||
Equipment Rentals [Member] | Accounting Standards Update 2014-09 [Member] | Reclassification of Hauling Fees [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 34,988 | 29,105 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 55,449 | 47,438 | |||||||||
New Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 211,372 | 232,057 | 180,702 | ||||||||
New Equipment Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 262,948 | 203,301 | |||||||||
New Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 262,948 | 203,301 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 232,057 | 180,702 | |||||||||
Used Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 92,021 | 86,052 | 74,132 | ||||||||
Used Equipment Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 125,125 | 107,329 | |||||||||
Used Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 125,125 | 107,329 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 86,052 | 74,132 | |||||||||
Parts Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 90,963 | 88,263 | 83,135 | ||||||||
Parts Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 120,454 | 114,253 | |||||||||
Parts Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 120,454 | 114,253 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 88,263 | 83,135 | |||||||||
Parts and Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 21,328 | 21,111 | |||||||||
Parts and Services [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 63,488 | 62,873 | |||||||||
Parts and Services [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 63,488 | 62,873 | |||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 21,328 | 21,111 | |||||||||
Other [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 11,775 | 39,765 | 34,142 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | $ 13,421 | 19,305 | 16,432 | ||||||||
Other [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 39,765 | 34,142 | |||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 74,753 | 63,247 | |||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | Reclassification of Hauling Fees [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | (34,988) | (29,105) | |||||||||
Rental Depreciation [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 208,453 | 169,455 | |||||||||
Rental Depreciation [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 208,453 | 169,455 | |||||||||
Rental Expense [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 89,520 | 77,706 | |||||||||
Rental Expense [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 89,520 | 77,706 | |||||||||
Rentals Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 55,449 | 47,438 | |||||||||
Rentals Other [Member] | Accounting Standards Update 2014-09 [Member] | Reclassification of Hauling Fees [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 55,449 | 47,438 | |||||||||
Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 19,305 | 16,432 | |||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 74,754 | 63,870 | |||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | Reclassification of Hauling Fees [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | $ (55,449) | $ (47,438) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Revenue by Type and by Applicable Accounting Standard (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,238,961 | 1,030,019 | |||||||||
Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 725,187 | ||||||||||
Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 623,178 | 626,409 | 535,250 | ||||||||
Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,238,961 | 1,030,019 | |||||||||
Topic 840 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 612,552 | 494,769 | |||||||||
Rental Revenues [Member] | Owned Equipment Rentals [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 669,205 | ||||||||||
Rental Revenues [Member] | Owned Equipment Rentals [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 569,746 | 461,609 | |||||||||
Rental Revenues [Member] | Owned Equipment Rentals [Member] | Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 668,087 | ||||||||||
Rental Revenues [Member] | Owned Equipment Rentals [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,118 | 1,334 | 2,038 | ||||||||
Rental Revenues [Member] | Owned Equipment Rentals [Member] | Topic 840 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 568,412 | 459,571 | |||||||||
Rental Revenues [Member] | Re Rent Revenues [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 25,342 | ||||||||||
Rental Revenues [Member] | Re Rent Revenues [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 22,447 | 17,407 | |||||||||
Rental Revenues [Member] | Re Rent Revenues [Member] | Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 25,342 | ||||||||||
Rental Revenues [Member] | Re Rent Revenues [Member] | Topic 840 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 22,447 | 17,407 | |||||||||
Ancillary And Other Rental Revenues [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 71,807 | ||||||||||
Ancillary And Other Rental Revenues [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 34,988 | 29,105 | |||||||||
Ancillary And Other Rental Revenues [Member] | Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 31,758 | ||||||||||
Ancillary And Other Rental Revenues [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 40,049 | 34,988 | 29,105 | ||||||||
Ancillary And Other Rental Revenues [Member] | Delivery and Pick-up [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 40,049 | ||||||||||
Ancillary And Other Rental Revenues [Member] | Delivery and Pick-up [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 34,988 | 29,105 | |||||||||
Ancillary And Other Rental Revenues [Member] | Delivery and Pick-up [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 40,049 | 34,988 | 29,105 | ||||||||
Ancillary And Other Rental Revenues [Member] | Other [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 31,758 | ||||||||||
Ancillary And Other Rental Revenues [Member] | Other [Member] | Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 31,758 | ||||||||||
Total Equipment Rental Revenues [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 766,354 | ||||||||||
Total Equipment Rental Revenues [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 627,181 | 508,121 | |||||||||
Total Equipment Rental Revenues [Member] | Adoption of Topic 842 | |||||||||||
Revenues: | |||||||||||
Revenues | 725,187 | ||||||||||
Total Equipment Rental Revenues [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 41,167 | 36,322 | 31,143 | ||||||||
Total Equipment Rental Revenues [Member] | Topic 840 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 590,859 | 476,978 | |||||||||
New Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
New Equipment Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 262,948 | 203,301 | |||||||||
New Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
New Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 262,948 | 203,301 | |||||||||
Used Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Used Equipment Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 125,125 | 107,329 | |||||||||
Used Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Used Equipment Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 125,125 | 107,329 | |||||||||
Parts Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Parts Sales [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 120,454 | 114,253 | |||||||||
Parts Sales [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Parts Sales [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 120,454 | 114,253 | |||||||||
Parts and Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Parts and Services [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 63,488 | 62,873 | |||||||||
Parts and Services [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Parts and Services [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 63,488 | 62,873 | |||||||||
Other [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 11,775 | 39,765 | 34,142 | ||||||||
Other [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 39,765 | 34,142 | |||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | $ 11,775 | 18,072 | 16,351 | ||||||||
Other [Member] | Accounting Standards Update 2014-09 [Member] | As Previously Reported [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 74,753 | 63,247 | |||||||||
Other [Member] | Topic 840 [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | $ 21,693 | $ 17,791 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Additional Information (Detail) | Oct. 01, 2019USD ($) | Dec. 31, 2019USD ($)Manufacturershares | Dec. 31, 2019USD ($)CustomerSegmentManufacturerBusinessshares | Dec. 31, 2018USD ($)Customer | Dec. 31, 2017USD ($)Customer | Jan. 01, 2019USD ($) |
Summary Of Significant Accounting Policy [Line Items] | ||||||
Customer accounted for more than 10% of revenue | Customer | 0 | 0 | 0 | |||
Bad debt expense as a percentage of total revenues | 0.50% | 0.20% | 0.40% | |||
Payment terms | 30 days | |||||
Salvage value | 25.00% | 25.00% | ||||
Impairment loss related to property and equipment | $ 0 | $ 0 | $ 0 | |||
Number of operating segments | Segment | 6 | |||||
Impairment of goodwill | $ 12,200,000 | $ 12,184,000 | ||||
Amortization of intangible assets | $ 4,132,000 | 3,320,000 | 0 | |||
Lessee operating lease option to extend | Lease terms include options to extend the lease when it is reasonably certain those options will be exercised. | |||||
Lessee operating lease, existence of option to extend | true | |||||
Workers' compensation, general liability and automobile liability | 5,900,000 | $ 5,900,000 | 4,800,000 | |||
Health insurance reserves | $ 1,600,000 | 1,600,000 | 1,300,000 | |||
Advertising costs | $ 600,000 | 500,000 | 500,000 | |||
Recognized income tax provisions | 50.00% | |||||
No. of manufacturers | Manufacturer | 5 | 5 | ||||
Issue of shares of non-vested period | 3 years | |||||
Unrecognized compensation expense related to non-vested stock | $ 6,400,000 | $ 6,400,000 | ||||
Expected non-vested stock recognized over a weighted-average period | 2 years | |||||
Share compensation expense | $ 4,700,000 | $ 4,200,000 | $ 3,500,000 | |||
Number of reportable segment | Segment | 5 | |||||
Number of principal activities | Business | 5 | |||||
Adjustment to retained earnings | 63,650,000 | $ 63,650,000 | ||||
Additional operating lease liabilities | 159,265,000 | 159,265,000 | ||||
Right-of-use operating lease assets, net | 156,570,000 | 156,570,000 | ||||
Finance lease liabilities recognized | 550,000 | 550,000 | ||||
Finance right-of-use lease assets | 365,000 | 365,000 | ||||
Adoption of Topic 842 | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Additional operating lease liabilities | 162,800,000 | 162,800,000 | ||||
Right-of-use operating lease assets, net | 160,600,000 | 160,600,000 | ||||
Finance lease liabilities recognized | 800,000 | 800,000 | ||||
Finance right-of-use lease assets | $ 500,000 | $ 500,000 | ||||
2016 Stock-Based Incentive Compensation Plan [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Stock-Based incentive compensation plan | shares | 1,645,414 | 1,645,414 | ||||
Fair Value [Member] | Level 1 [Member] | Senior Unsecured Notes Due 2022 [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Senior unsecured notes, due year | 2025 | 2025 | ||||
SG&A Expenses [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Amortization of intangible assets | $ 4,100,000 | $ 3,300,000 | ||||
Customer Relationships [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Estimated useful lives of acquired intangible assets | 10 years | |||||
Tradenames [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Estimated useful lives of acquired intangible assets | 1 year | |||||
Leasehold Interests [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Estimated useful lives of acquired intangible assets | 10 years | |||||
New Equipment Sales and Service Revenues [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Impairment of goodwill | $ 12,200,000 | |||||
New Equipment Sales [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Impairment of goodwill | $ 10,700,000 | 10,700,000 | ||||
Service Revenues [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Impairment of goodwill | $ 1,500,000 | $ 1,500,000 | ||||
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 | |||||
Rental and Sales Equipment Manufacturers [Member] | Property, Plant and Equipment [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Percentage of revenue/purchase | 54.00% | |||||
Maximum [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Restricted common shares, percentage | 1.00% | 1.00% | 1.00% | |||
Maximum [Member] | Adoption of Topic 842 | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Adjustment to retained earnings | $ 100,000 | |||||
Maximum [Member] | Customer Concentration Risk [Member] | Revenues [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Percentage of revenue/purchase | 2.00% | 2.00% | 2.00% | |||
Minimum [Member] | ||||||
Summary Of Significant Accounting Policy [Line Items] | ||||||
Reporting units, percentage of fair value that exceeded respective carrying value | 24.00% | 24.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2019 | |
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 Accoun_8
Summary of Significant Accounting Policies - Schedule of Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||
Beginning balance | $ 105,843 | $ 31,197 |
Increases (Decreases) | (12,184) | 74,646 |
Ending balance | 131,442 | 105,843 |
CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 37,783 | |
Equipment Rental Component 1 [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 34,297 | |
Increases (Decreases) | 34,297 | |
Ending balance | 49,215 | 34,297 |
Equipment Rental Component 1 [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 14,918 | |
Equipment Rental Component 2 [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 42,536 | 18,700 |
Increases (Decreases) | 23,836 | |
Ending balance | 62,311 | 42,536 |
Equipment Rental Component 2 [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 19,775 | |
New Equipment Sales [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 10,434 | |
Increases (Decreases) | (10,688) | 10,434 |
Ending balance | 10,434 | |
New Equipment Sales [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 254 | |
Used Equipment Sales [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 8,461 | 6,137 |
Increases (Decreases) | 2,324 | |
Ending balance | 8,961 | 8,461 |
Used Equipment Sales [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 500 | |
Parts Sales [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 8,910 | 6,360 |
Increases (Decreases) | 2,550 | |
Ending balance | 10,955 | 8,910 |
Parts Sales [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | 2,045 | |
Parts and Services [Member] | ||
Goodwill [Line Items] | ||
Beginning balance | 1,205 | |
Increases (Decreases) | (1,496) | 1,205 |
Ending balance | $ 1,205 | |
Parts and Services [Member] | CEC and Rental Inc [Member] | ||
Goodwill [Line Items] | ||
Increases (Decreases) | $ 291 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Gross Carrying Values, Accumulated Amortization and Net Carrying Amounts of Major Classes of Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Gross | $ 39,900 | $ 31,700 |
Accumulated amortization, intangible assets | 6,952 | 3,320 |
Net | 32,948 | 28,380 |
Customer Relationships [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 39,500 | 31,000 |
Accumulated amortization, intangible assets | 6,729 | 2,850 |
Net | 32,771 | 28,150 |
Tradenames [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 200 | 500 |
Accumulated amortization, intangible assets | 183 | 450 |
Net | 17 | 50 |
Leasehold Interests [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross | 200 | 200 |
Accumulated amortization, intangible assets | 40 | 20 |
Net | $ 160 | $ 180 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Schedule of Expected Amortization Expense of Intangible Assets with Remaining Carrying Value (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
2020 | $ 3,987 | |
2021 | 3,970 | |
2022 | 3,970 | |
2023 | 3,970 | |
2024 | 3,970 | |
Thereafter | 13,081 | |
Net | $ 32,948 | $ 28,380 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Level 3 [Member] | Carrying Amount [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable with interest computed at 5.25% respectively (Level 3) | $ 25,201 | $ 23,666 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 726 | |
Level 3 [Member] | Fair Value [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable with interest computed at 5.25% respectively (Level 3) | 21,615 | 19,870 |
Capital leases payable with interest computed at 5.929% to 9.55% (Level 3) | 330 | |
Level 2 [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 with interest computed at (5.625%) (Level 1) | 945,566 | 944,780 |
Level 2 [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 with interest computed at (5.625%) (Level 1) | $ 995,125 | $ 871,625 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Estimated Incremental Borrowing Rates for Similar Types of Borrowing Arrangements (Parenthetical) (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Carrying Amount [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 5.25% | 5.50% |
Capital lease payable, interest rate, minimum | 5.929% | |
Capital lease payable interest rate, maximum | 9.55% | |
Fair Value [Member] | Level 3 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Manufacturer flooring plans payable, interest rate | 5.25% | 5.50% |
Capital lease payable, interest rate, minimum | 5.929% | |
Capital lease payable interest rate, maximum | 9.55% | |
Senior Unsecured Notes Due 2025 [Member] | Carrying Amount [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2025 | 2025 |
Senior unsecured notes, interest rate | 5.625% | 5.625% |
Senior Unsecured Notes Due 2025 [Member] | Fair Value [Member] | Level 2 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Senior unsecured notes, due year | 2025 | 2025 |
Senior unsecured notes, interest rate | 5.625% | 5.625% |
Summary of Significant Accou_13
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Basic net income per share: | |||||||||||
Net income | $ 21,923 | $ 28,431 | $ 22,614 | $ 14,243 | $ 25,060 | $ 21,314 | $ 20,771 | $ 9,478 | $ 87,211 | $ 76,623 | $ 109,658 |
Weighted average number of common shares outstanding | 35,859 | 35,677 | 35,516 | ||||||||
Net income per common share — basic | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.60 | $ 0.58 | $ 0.27 | $ 2.43 | $ 2.15 | $ 3.09 |
Diluted net income per share: | |||||||||||
Net income | $ 21,923 | $ 28,431 | $ 22,614 | $ 14,243 | $ 25,060 | $ 21,314 | $ 20,771 | $ 9,478 | $ 87,211 | $ 76,623 | $ 109,658 |
Weighted average number of common shares outstanding | 35,859 | 35,677 | 35,516 | ||||||||
Effect of dilutive securities: | |||||||||||
Weighted average number of common shares outstanding — diluted | 36,033 | 35,903 | 35,699 | ||||||||
Net income per common share — diluted | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.59 | $ 0.58 | $ 0.26 | $ 2.42 | $ 2.13 | $ 3.07 |
Non-vested restricted stock [Member] | |||||||||||
Effect of dilutive securities: | |||||||||||
Effect of dilutive non-vested stock | 174 | 226 | 183 | ||||||||
Common shares excluded from the denominator as anti-dilutive: | |||||||||||
Common shares excluded from the denominator as anti-dilutive | 32 | 43 |
Summary of Significant Accou_14
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, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Non-vested stock, beginning balance, Number of Shares | 379,559 | 445,964 |
Granted, Number of Shares | 194,192 | 143,121 |
Vested, Number of Shares | (161,615) | (181,194) |
Forfeited, Number of Shares | (34,396) | (28,332) |
Non-vested stock, ending balance, Number of Shares | 377,740 | 379,559 |
Non-vested stock, beginning balance, Weighted Average Grant Date Fair Value | $ 25.87 | $ 19.70 |
Granted, Weighted Average Grant Date Fair Value | 30.20 | 37.10 |
Vested, Weighted Average Grant Date Fair Value | 23.79 | 20.53 |
Forfeited, Weighted Average Grant Date Fair Value | 22.90 | 19.61 |
Non-vested stock, ending balance, Weighted Average Grant Date Fair Value | $ 29.26 | $ 25.87 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Detail) $ in Thousands | Feb. 01, 2019USD ($)Branch | Apr. 01, 2018USD ($)Branch | Jan. 01, 2018USD ($)Branch | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 131,442 | $ 105,843 | $ 31,197 | |||
We-Rent-It [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, completion date | Feb. 1, 2019 | |||||
Number of branches located | Branch | 6 | |||||
Aggregate consideration paid to the owners | $ 108,500 | |||||
Percentage of goodwill deductible for income tax purposes | 100.00% | |||||
Acquisition costs | $ 400 | |||||
Goodwill | $ 37,783 | |||||
CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, completion date | Jan. 1, 2018 | |||||
Number of branches located | Branch | 3 | |||||
Aggregate consideration paid to the owners | $ 132,400 | |||||
Percentage of goodwill deductible for income tax purposes | 100.00% | |||||
Acquisition costs | $ 1,000 | |||||
Goodwill | $ 45,092 | |||||
Rental Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Business acquisition, completion date | Apr. 1, 2018 | |||||
Number of branches located | Branch | 5 | |||||
Aggregate consideration paid to the owners | $ 68,600 | |||||
Percentage of goodwill deductible for income tax purposes | 100.00% | |||||
Acquisition costs | $ 300 | |||||
Goodwill | 29,554 | |||||
Rental Inc [Member] | Purchase Agreement [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Accrued purchase price consideration included in goodwill | $ 3,400 |
Acquisitions - Summary of Estim
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Feb. 01, 2019 | Dec. 31, 2018 | Apr. 01, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 131,442 | $ 105,843 | $ 31,197 | |||
We-Rent-It [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 1,745 | |||||
Accounts receivable | 5,119 | |||||
Inventory | 731 | |||||
Prepaid expenses and other assets | 544 | |||||
Rental equipment | 51,747 | |||||
Property and equipment | 3,207 | |||||
Other assets | 21 | |||||
Intangible assets | 8,700 | |||||
Total identifiable assets acquired | 71,814 | |||||
Accounts payable | (115) | |||||
Accrued expenses payable and other liabilities | (991) | |||||
Total liabilities assumed | (1,106) | |||||
Net identifiable assets acquired | 70,708 | |||||
Goodwill | 37,783 | |||||
Net assets acquired | $ 108,491 | |||||
CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 1,244 | |||||
Accounts receivable | 7,583 | |||||
Inventory | 504 | |||||
Prepaid expenses and other assets | 324 | |||||
Rental equipment | 55,342 | |||||
Property and equipment | 2,700 | |||||
Intangible assets | 21,500 | |||||
Total identifiable assets acquired | 89,197 | |||||
Accounts payable | (1,023) | |||||
Accrued expenses payable and other liabilities | (876) | |||||
Total liabilities assumed | (1,899) | |||||
Net identifiable assets acquired | 87,298 | |||||
Goodwill | 45,092 | |||||
Net assets acquired | $ 132,390 | |||||
Rental Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Cash | $ 260 | |||||
Accounts receivable | 2,873 | |||||
Inventory | 5,324 | |||||
Prepaid expenses and other assets | 47 | |||||
Rental equipment | 22,578 | |||||
Property and equipment | 1,935 | |||||
Intangible assets | 10,200 | |||||
Total identifiable assets acquired | 43,217 | |||||
Accounts payable | (439) | |||||
Manufacturer flooring plans payable | (3,293) | |||||
Accrued expenses payable and other liabilities | (469) | |||||
Total liabilities assumed | (4,201) | |||||
Net identifiable assets acquired | 39,016 | |||||
Goodwill | 29,554 | |||||
Net assets acquired | $ 68,570 |
Acquisitions - Summary of Est_2
Acquisitions - Summary of Estimated Fair Values of Assets Acquired and Liabilities Assumed (Parenthetical) (Detail) $ in Thousands | Feb. 01, 2019USD ($)ReportingUnit | Apr. 01, 2018USD ($)ReportingUnit | Jan. 01, 2018USD ($)ReportingUnit | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||||
Goodwill | $ 131,442 | $ 105,843 | $ 31,197 | |||
We-Rent-It [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 8,700 | |||||
Goodwill | $ 37,783 | |||||
Number of goodwill reporting units | ReportingUnit | 6 | |||||
We-Rent-It [Member] | Rental Component 1 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 14,918 | |||||
We-Rent-It [Member] | Rental Component 2 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 19,775 | |||||
We-Rent-It [Member] | Parts [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 2,045 | |||||
We-Rent-It [Member] | Service [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 291 | |||||
We-Rent-It [Member] | New Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 254 | |||||
We-Rent-It [Member] | Used Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 500 | |||||
CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 21,500 | |||||
Goodwill | $ 45,092 | |||||
Number of goodwill reporting units | ReportingUnit | 6 | |||||
CEC [Member] | Rental Component 1 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 25,233 | |||||
CEC [Member] | Rental Component 2 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 18,391 | |||||
CEC [Member] | Parts [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 379 | |||||
CEC [Member] | Service [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 240 | |||||
CEC [Member] | New Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 217 | |||||
CEC [Member] | Used Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 632 | |||||
Rental Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 10,200 | |||||
Goodwill | $ 29,554 | |||||
Number of goodwill reporting units | ReportingUnit | 6 | |||||
Rental Inc [Member] | Rental Component 1 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 9,064 | |||||
Rental Inc [Member] | Rental Component 2 [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 5,445 | |||||
Rental Inc [Member] | Parts [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 2,171 | |||||
Rental Inc [Member] | Service [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 965 | |||||
Rental Inc [Member] | New Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 10,217 | |||||
Rental Inc [Member] | Used Equipment [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | 1,692 | |||||
Customer Relationships [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Life (years) | 10 years | |||||
Customer Relationships [Member] | We-Rent-It [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 8,500 | |||||
Life (years) | 10 years | |||||
Customer Relationships [Member] | CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 21,000 | |||||
Life (years) | 10 years | |||||
Customer Relationships [Member] | Rental Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 10,000 | |||||
Life (years) | 10 years | |||||
Tradenames [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Life (years) | 1 year | |||||
Tradenames [Member] | We-Rent-It [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 200 | |||||
Life (years) | 1 year | |||||
Tradenames [Member] | CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 300 | |||||
Life (years) | 1 year | |||||
Tradenames [Member] | Rental Inc [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 200 | |||||
Life (years) | 1 year | |||||
Leasehold Interests [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Life (years) | 10 years | |||||
Leasehold Interests [Member] | CEC [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Fair Value (amounts in thousands) | $ 200 | |||||
Life (years) | 10 years |
Acquisitions - Unaudited Pro Fo
Acquisitions - Unaudited Pro Forma Consolidated Statements of Income Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||||||||
Total revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
Pretax income | $ 26,854 | $ 38,760 | $ 30,895 | $ 19,352 | $ 34,755 | $ 28,971 | $ 27,869 | $ 13,068 | $ 115,861 | 104,663 | 59,344 |
Elimination of merger related costs | 788 | ||||||||||
Pro forma pretax income (loss) | 104,663 | 60,132 | |||||||||
Income tax expense (benefit) | 28,040 | (50,511) | |||||||||
Net income (loss) | $ 76,623 | $ 110,643 | |||||||||
Net income (loss) per share – basic | $ 2.15 | $ 3.12 | |||||||||
Net income (loss) per share - diluted | $ 2.13 | $ 3.10 | |||||||||
Pro forma adjustments to pretax income: | |||||||||||
Total revenues | $ 1,282,371 | $ 1,101,751 | |||||||||
Pretax income | 112,575 | 69,654 | |||||||||
Pro forma adjustments to pretax income: | |||||||||||
Impact of fair value mark-ups/useful life changes on depreciation | (5,201) | (6,369) | |||||||||
Intangible asset amortization | (1,350) | (3,620) | |||||||||
Interest expense | (6,144) | (1,609) | |||||||||
Elimination of merger related costs | 5,285 | ||||||||||
Elimination of historic interest expense | 599 | 2,348 | |||||||||
Pro forma pretax income (loss) | 100,479 | 65,689 | |||||||||
Income tax expense (benefit) | 26,953 | (55,179) | |||||||||
Net income (loss) | $ 73,526 | $ 120,868 | |||||||||
Net income (loss) per share – basic | $ 2.05 | $ 3.40 | |||||||||
Net income (loss) per share - diluted | $ 2.04 | $ 3.39 | |||||||||
CEC [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenues | $ 36,790 | ||||||||||
Pretax income | 3,043 | ||||||||||
Pro forma adjustments to pretax income: | |||||||||||
Impact of fair value mark-ups/useful life changes on depreciation | (3,575) | ||||||||||
Intangible asset amortization | (2,420) | ||||||||||
Elimination of merger related costs | 4,497 | ||||||||||
Elimination of historic interest expense | 1,966 | ||||||||||
Pro forma pretax income (loss) | 3,511 | ||||||||||
Income tax expense (benefit) | (2,949) | ||||||||||
Net income (loss) | $ 6,460 | ||||||||||
Net income (loss) per share – basic | $ 0.18 | ||||||||||
Net income (loss) per share - diluted | $ 0.18 | ||||||||||
Rental Inc [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenues | $ 7,408 | $ 34,942 | |||||||||
Pretax income | 1,020 | 7,267 | |||||||||
Pro forma adjustments to pretax income: | |||||||||||
Impact of fair value mark-ups/useful life changes on depreciation | (749) | (2,794) | |||||||||
Intangible asset amortization | (300) | (1,200) | |||||||||
Interest expense | (480) | (1,609) | |||||||||
Elimination of historic interest expense | 82 | 382 | |||||||||
Pro forma pretax income (loss) | (427) | 2,046 | |||||||||
Income tax expense (benefit) | (114) | (1,719) | |||||||||
Net income (loss) | $ (313) | $ 3,765 | |||||||||
Net income (loss) per share – basic | $ (0.01) | $ 0.11 | |||||||||
Net income (loss) per share - diluted | $ (0.01) | $ 0.11 | |||||||||
We-Rent-It [Member] | |||||||||||
Business Acquisition [Line Items] | |||||||||||
Total revenues | $ 36,002 | ||||||||||
Pretax income | 6,892 | ||||||||||
Pro forma adjustments to pretax income: | |||||||||||
Impact of fair value mark-ups/useful life changes on depreciation | (4,452) | ||||||||||
Intangible asset amortization | (1,050) | ||||||||||
Interest expense | (5,664) | ||||||||||
Elimination of historic interest expense | 517 | ||||||||||
Pro forma pretax income (loss) | (3,757) | ||||||||||
Income tax expense (benefit) | (973) | ||||||||||
Net income (loss) | $ (2,784) | ||||||||||
Net income (loss) per share – basic | $ (0.08) | ||||||||||
Net income (loss) per share - diluted | $ (0.08) |
Receivables - Summary of Receiv
Receivables - Summary of Receivables (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Trade receivables | $ 186,472 | $ 194,601 |
Unbilled rental revenue | 9,529 | 8,833 |
Income tax receivables | 1,405 | 2,181 |
Other | 34 | 35 |
Total receivables | 197,440 | 205,650 |
Less allowance for doubtful accounts | (5,236) | (4,094) |
Total receivables, net | $ 192,204 | $ 201,556 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory [Line Items] | ||
Total inventories, net | $ 85,478 | $ 104,598 |
New Equipment Sales [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | 65,549 | 84,603 |
Used Equipment Sales [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | 1,993 | 1,980 |
Parts, Supplies and Other [Member] | ||
Inventory [Line Items] | ||
Total inventories, net | $ 17,936 | $ 18,015 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Net of reserves for inventory obsolescence | $ 331 | $ 368 |
Property and Equipment - Summar
Property and Equipment - Summary of Net Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 287,346 | $ 257,783 |
Less accumulated depreciation and amortization | (156,782) | (142,662) |
Total net property and equipment | 130,564 | 115,121 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 7,597 | 7,597 |
Transportation Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 130,099 | 106,011 |
Building and Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 69,031 | 63,060 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 53,597 | 51,758 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 18,732 | 17,811 |
Property under Capital Leases [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,417 | |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 8,290 | $ 9,129 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property Plant And Equipment [Abstract] | |||
Depreciation and amortization of property and equipment | $ 28.4 | $ 24.6 | $ 23.8 |
Manufacturer Flooring Plans P_3
Manufacturer Flooring Plans Payable - Additional Information (Detail) - Manufacturer Flooring Plans Payable [Member] | Dec. 31, 2019 |
Schedule Of Long Term Debt [Line Items] | |
Debt instrument interest rate, minimum | 0.00% |
Debt instrument interest rate, maximum | 4.75% |
Manufacturer Flooring Plans P_4
Manufacturer Flooring Plans Payable - Maturities of Manufacturer Flooring Plans Payable (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Schedule Of Long Term Debt [Line Items] | ||
Total | $ 25,201 | $ 23,666 |
Manufacturer Flooring Plans Payable [Member] | ||
Schedule Of Long Term Debt [Line Items] | ||
2020 | 11,658 | |
2021 | 13,369 | |
2022 | 174 | |
Total | $ 25,201 |
Accrued Expenses Payable and _3
Accrued Expenses Payable and Other Liabilities - Accrued Expenses Payable and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts Payable And Accrued Liabilities Current And Noncurrent [Abstract] | ||
Payroll and related liabilities | $ 30,903 | $ 24,864 |
Sales, use and property taxes | 11,042 | 10,069 |
Accrued interest | 18,804 | 18,771 |
Accrued insurance | 5,837 | 4,328 |
Deferred revenue | 4,038 | 5,973 |
Other | 7,758 | 9,366 |
Total accrued expenses payable and other liabilities | $ 78,382 | $ 73,371 |
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, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Estimated offering expenses | $ 2,857,000 | $ 3,000,000 | ||||
One-time loss recorded on early extinguishment of debt | $ (25,363,000) | |||||
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 | 2025 | |||||
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 | 2025 | |||||
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 | |||||
Debt instrument, Payment terms | 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). | |||||
Debt Instrument, Redemption description | 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. | |||||
5.6250% Senior Notes [Member] | Maximum [Member] | Before September 1, 2020 [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Percentage of principal amount of new notes may be redeemed | 40.00% | |||||
7% Senior Notes [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Senior unsecured notes, interest rate | 7.00% | |||||
Senior unsecured notes, maturity year | 2022 | |||||
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% | |||||
One-time loss recorded on early extinguishment of debt | 25,400,000 | |||||
One-time loss recorded on early extinguishment of debt, after tax | 18,900,000 | |||||
Payment of tender premiums | 12,800,000 | |||||
Payment of premiums to redeem remaining outstanding old notes | 10,500,000 | |||||
Write-off of unamortized note discount | 2,000,000 | |||||
Transaction costs incurred | $ 1,600,000 |
Senior Unsecured Notes - Reconc
Senior Unsecured Notes - Reconciliation of Senior Unsecured Notes to Condensed Consolidated Balance Sheets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | |||
Senior unsecured notes, beginning balance | $ 944,780 | ||
Amortization of deferred financing costs | 1,010 | $ 1,083 | $ 1,046 |
Senior unsecured notes, ending balance | 945,566 | 944,780 | |
Senior Unsecured Notes [Member] | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes, beginning balance | 944,780 | 944,088 | |
Accretion of discount | 1,539 | 1,539 | |
Amortization of note premium | (1,062) | (1,062) | |
Amortization of deferred financing costs | 309 | 312 | |
Senior unsecured notes, ending balance | $ 945,566 | 944,780 | $ 944,088 |
Senior Unsecured Notes [Member] | 5.6250% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Additional deferred financing costs | $ (97) |
Senior Secured Credit Facility
Senior Secured Credit Facility - Additional Information (Detail) - USD ($) | Feb. 01, 2019 | Dec. 22, 2017 | Dec. 21, 2017 | Dec. 31, 2019 | Feb. 18, 2020 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Outstanding letters of credit | $ 7,700,000 | $ 7,700,000 | ||||
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 | extended the maturity date of the credit facility from December 22, 2022 to January 31, 2024 | extended the maturity date of the credit facility from May 21, 2019 to December 22, 2022 | ||||
Debt instrument maturity date | Jan. 31, 2024 | Dec. 22, 2022 | May 21, 2019 | |||
Uncommitted incremental revolving capacity | $ 250,000,000 | $ 150,000,000 | ||||
Outstanding letters of credit | $ 216,900,000 | |||||
Available borrowings under our senior secured credit facility | $ 525,400,000 | |||||
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 | $ 559,400,000 | |||||
Revolving Credit Facility [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee margin percentage | 0.375% | |||||
Revolving Credit Facility [Member] | Maximum [Member] | Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate lowered in applicable to Letter of Credit | 2.00% | |||||
Revolving Credit Facility [Member] | Maximum [Member] | Base Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin Percentage | 0.75% | 1.00% | ||||
Revolving Credit Facility [Member] | Maximum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin Percentage | 1.75% | 2.00% | ||||
Revolving Credit Facility [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Unused commitment fee margin percentage | 0.25% | |||||
Revolving Credit Facility [Member] | Minimum [Member] | Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Margin rate lowered in applicable to Letter of Credit | 1.50% | |||||
Revolving Credit Facility [Member] | Minimum [Member] | Base Rate [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin Percentage | 0.25% | 0.50% | ||||
Revolving Credit Facility [Member] | Minimum [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin Percentage | 1.25% | 1.50% | ||||
Letter of Credit Sub-Facility, and Guaranty [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Existing credit facility with its lenders | $ 30,000,000 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | |
Leases [Abstract] | |||
Net operating lease right-of-use assets | $ 156,570 | ||
Net finance lease right-of-use assets | 365 | ||
Operating lease liabilities | 159,265 | ||
Finance lease liabilities | $ 550 | ||
Weighted average remaining lease term for operating leases | 10 years 4 months 24 days | ||
Weighted average remaining lease term for finance leases | 2 years 3 months 18 days | ||
Weighted average discount rate for operating leases | 6.80% | ||
Weighted average discount rate for finance leases | 5.90% | ||
Rent expense | $ 23,100 | $ 20,100 | |
Future minimum operating lease payments 2019 | 21,800 | ||
Future minimum operating lease payments 2020 | 21,900 | ||
Future minimum operating lease payments 2021 | 21,200 | ||
Future minimum operating lease payments 2022 | 19,900 | ||
Future minimum operating lease payments 2023 | 17,100 | ||
Future minimum operating lease payments thereafter | 86,400 | ||
Future minimum capital lease payments 2019 | 300 | ||
Future minimum capital lease payments 2020 | 300 | ||
Future minimum capital lease payments 2021 | 300 | ||
Future minimum capital lease interest payments | $ 100 |
Leases - Summary of Lease Costs
Leases - Summary of Lease Costs, Under Topic 842, for Operating and Finance Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Finance lease costs | |
Amortization of finance lease right-of-use assets | $ 163 |
Total lease cost | 22,450 |
SG&A Expenses [Member] | |
Lessee Lease Description [Line Items] | |
Operating lease cost | 22,293 |
Finance lease costs | |
Amortization of finance lease right-of-use assets | 162 |
Variable lease cost | 523 |
Interest Expense [Member] | |
Finance lease costs | |
Interest on lease liabilities | 39 |
Other Income [Member] | |
Finance lease costs | |
Sublease income | $ (567) |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurements of lease liabilities: | |
Operating cash flows for operating leases | $ 21,720 |
Operating cash flows for finance leases | 39 |
Finance cash flows for finance leases | $ 232 |
Leases - Summary of Undiscounte
Leases - Summary of Undiscounted Cash Flows and Operating Lease Liabilities Recorded on Consolidated Balance Sheet (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 21,697 |
2021 | 21,672 |
2022 | 21,508 |
2023 | 21,506 |
2024 | 21,740 |
Thereafter | 114,792 |
Total minimum lease payments | 222,915 |
Less: amount of lease payments representing interest | (63,650) |
Additional operating lease liabilities | 159,265 |
Finance Leases | |
2020 | 270 |
2021 | 270 |
2022 | 45 |
Total minimum lease payments | 585 |
Less: amount of lease payments representing interest | (35) |
Finance lease liabilities recognized | $ 550 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 21.00% | 21.00% | 35.00% |
One-time decrease in income tax expense from re-measurement of deferred tax assets and liabilities | $ 66,900,000 | ||
Federal net operating loss carry forwards | $ 86,200,000 | ||
Expire in varying amounts for federal net operating loss carry forwards | 2030 through 2036 | ||
Federal net operating loss carry forwards does not expire | $ 366,900,000 | ||
Federal alternative minimum tax credit carry forwards | 1,500,000 | ||
General business credit carry forwards | $ 400,000 | ||
Expire in varying amounts for business credit carry forwards | 2026 and 2037 | ||
State income tax credits expiration date | 2022 | ||
State income tax credits carry forward | $ 200,000 | ||
Tax Cuts and Jobs Act, AMT credit refundable period | 2018 and 2022 | ||
Tax Cuts and Jobs Act, Reclassification of deferred income taxes to income tax receivable | $ 800,000 | ||
Decreased in valuation allowance for state net operating losses that are expected to be fully realized | 600,000 | ||
Unrecognized tax benefits | $ 0 | $ 0 | $ 106,000 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
U.S. Federal, Current | $ (761) | $ (1,523) | |
U.S. Federal, Deferred | 25,134 | 23,127 | $ (54,241) |
U.S. Federal, Total | 24,373 | 21,604 | (54,241) |
State, Current | 2,398 | 2,868 | 221 |
State, Deferred | 1,879 | 3,568 | 3,706 |
State, Total | 4,277 | 6,436 | 3,927 |
Current, Total | 1,637 | 1,345 | 221 |
Deferred, Total | 27,013 | 26,695 | (50,535) |
Total | $ 28,650 | $ 28,040 | $ (50,314) |
Income Taxes - Deferred Income
Income Taxes - Deferred Income Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Accounts receivable | $ 1,283 | $ 1,010 |
Inventories | 83 | 93 |
Net operating losses | 101,212 | 86,859 |
AMT and tax credits | 1,334 | 2,110 |
Sec 263A costs | 608 | 752 |
Accrued liabilities | 2,970 | 2,869 |
Deferred compensation | 1,499 | 1,561 |
Accrued interest | 410 | 387 |
Stock-based compensation | 247 | 146 |
Goodwill and intangible assets | 711 | 346 |
Other assets | 597 | 415 |
Deferred tax assets, Total | 110,954 | 96,548 |
Valuation allowance | (609) | |
Deferred tax assets, net of valuation allowance, Total | 110,954 | 95,939 |
Deferred tax liabilities: | ||
Property and equipment | (287,654) | (245,198) |
Investments | (1,072) | (1,076) |
Goodwill and intangible assets | (2,354) | (2,778) |
Deferred tax liabilities, Total | (291,080) | (249,052) |
Net deferred tax liabilities | $ (180,126) | $ (153,113) |
Income Taxes - Actual Income Ta
Income Taxes - Actual Income Tax Expense (benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Computed tax at statutory rates | $ 24,331 | $ 21,979 | $ 20,770 |
Permanent items - other | 1,065 | 1,021 | 911 |
Permanent items - excess of tax deductible goodwill | (2,130) | ||
State income tax, net of federal tax effect | 6,944 | 5,246 | 2,563 |
Change in valuation allowance | (609) | (123) | 397 |
Change in uncertain tax positions | (83) | (5,960) | |
Other - change in deferred state rate | (3,081) | ||
Impact of the Act federal rate change | (66,865) | ||
Total | $ 28,650 | $ 28,040 | $ (50,314) |
Income Taxes - Amounts of Gross
Income Taxes - Amounts of Gross Unrecognized Tax Benefits (Detail) | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Income Tax Disclosure [Abstract] | |
Gross unrecognized tax benefits at January 1 | $ 106,000 |
Decreases in tax positions taken in prior years | (106,000) |
Gross unrecognized tax benefits at December 31 | $ 0 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Line Items] | ||
Outstanding letters of credit | $ 7.7 | $ 7.7 |
Letter of Credit [Member] | ||
Commitments And Contingencies Disclosure [Line Items] | ||
Expiration date of letter of credit | May 31, 2020 | |
Line of credit renewed terms | 1 year |
Employee Benefit Plan - Additio
Employee Benefit Plan - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Compensation And Retirement Disclosure [Abstract] | |||
Amount of contributions in profit - sharing plan net of employee forfeitures | $ 5.5 | $ 2.5 | $ 2.2 |
Deferred Compensation Plans - A
Deferred Compensation Plans - Additional Information (Detail) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)CompensationPlan | Dec. 31, 2018USD ($) | |
Postemployment Benefits [Abstract] | ||
Number of deferred compensation plan | CompensationPlan | 1 | |
Effective rate | 5.50% | |
Aggregate deferred compensation payable | $ 2,098 | $ 1,989 |
Accrued interest | $ 1,600 | $ 1,500 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Commissions paid | $ 0.9 | $ 0.8 | $ 0.8 |
John M. Engquist [Member] | B-C Equipment Sales Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 50.00% | ||
Products and services purchased | $ 0.3 | 0.1 | 0.4 |
Sales to related party | $ 0.1 | $ 0.1 | $ 0.1 |
John M. Engquist [Member] | Perkins-McKenzie Insurance Agency Inc. [Member] | |||
Related Party Transaction [Line Items] | |||
Percentage of ownership interest in equity | 48.00% | 48.00% | 48.00% |
Summarized Quarterly Financia_3
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
Income from operations | 41,310 | 55,503 | 47,673 | 35,675 | 50,899 | 45,318 | 43,103 | 27,326 | 180,161 | 166,646 | 137,915 |
Income before provision for income taxes | 26,854 | 38,760 | 30,895 | 19,352 | 34,755 | 28,971 | 27,869 | 13,068 | 115,861 | 104,663 | 59,344 |
Net income | $ 21,923 | $ 28,431 | $ 22,614 | $ 14,243 | $ 25,060 | $ 21,314 | $ 20,771 | $ 9,478 | $ 87,211 | $ 76,623 | $ 109,658 |
Basic net income per common share | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.60 | $ 0.58 | $ 0.27 | $ 2.43 | $ 2.15 | $ 3.09 |
Diluted net income per common share | $ 0.61 | $ 0.79 | $ 0.63 | $ 0.40 | $ 0.70 | $ 0.59 | $ 0.58 | $ 0.26 | $ 2.42 | $ 2.13 | $ 3.07 |
Summarized Quarterly Financia_4
Summarized Quarterly Financial Data (Unaudited) - Summary of Unaudited Quarterly Financial Results of Operations (Parenthetical) (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 31, 2019 | Dec. 31, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | ||
non-cash impairment charge related to impairment of goodwill | $ 12,200 | $ 12,184 |
non-cash impairment charge after-tax, related to impairment of goodwill | $ 9,900 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2019CustomerSegment | Dec. 31, 2018Customer | Dec. 31, 2017Customer | |
Segment Reporting [Abstract] | |||
Number of reportable segment | Segment | 5 | ||
Sales to international customers | 0.20% | 0.10% | 0.40% |
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, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Revenues: | |||||||||||
Revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
Segment Gross Profit: | |||||||||||
Total gross profit | 499,170 | 438,534 | 359,908 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 1,974,610 | 1,727,181 | 1,974,610 | 1,727,181 | |||||||
Equipment Rentals [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 766,354 | 627,181 | 508,121 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 346,882 | 273,759 | 213,522 | ||||||||
New Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 27,719 | 30,891 | 22,599 | ||||||||
Used Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 47,328 | 39,073 | 33,197 | ||||||||
Parts Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 32,892 | 32,191 | 31,118 | ||||||||
Services Revenues [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 45,995 | 42,160 | 41,762 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 1,336,590 | 1,199,196 | 995,877 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 500,816 | 418,074 | 342,198 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 1,303,151 | 1,246,096 | 1,303,151 | 1,246,096 | |||||||
Operating Segments [Member] | Equipment Rentals [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 766,354 | 627,181 | 508,121 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 346,882 | 273,759 | 213,522 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 1,217,673 | 1,141,498 | 1,217,673 | 1,141,498 | |||||||
Operating Segments [Member] | New Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 27,719 | 30,891 | 22,599 | ||||||||
Operating Segments [Member] | Used Equipment Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 47,328 | 39,073 | 33,197 | ||||||||
Segment identified assets: | |||||||||||
Total assets | 67,542 | 86,583 | 67,542 | 86,583 | |||||||
Operating Segments [Member] | Parts Sales [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 32,892 | 32,191 | 31,118 | ||||||||
Operating Segments [Member] | Services Revenues [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | 45,995 | 42,160 | 41,762 | ||||||||
Operating Segments [Member] | Parts and Services [Member] | |||||||||||
Segment identified assets: | |||||||||||
Total assets | 17,936 | 18,015 | 17,936 | 18,015 | |||||||
Non-Segmented [Member] | |||||||||||
Segment Revenues: | |||||||||||
Revenues | 11,775 | 39,765 | 34,142 | ||||||||
Segment Gross Profit: | |||||||||||
Total gross profit | (1,646) | 20,460 | $ 17,710 | ||||||||
Segment identified assets: | |||||||||||
Total assets | $ 671,459 | $ 481,085 | $ 671,459 | $ 481,085 |
Consolidating Financial Infor_3
Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Balance Sheet (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Assets: | ||||
Cash | $ 14,247 | $ 16,677 | ||
Receivables, net | 192,204 | 201,556 | ||
Inventories, net | 85,478 | 104,598 | ||
Prepaid expenses and other assets | 10,262 | 10,508 | ||
Rental equipment, net | 1,217,673 | 1,141,498 | ||
Property and equipment, net | 130,564 | 115,121 | ||
Operating lease right-of-use assets, net | 156,570 | |||
Finance lease right-of-use assets, net | 365 | |||
Deferred financing costs, net | 2,857 | 3,000 | ||
Intangible assets, net | 32,948 | 28,380 | ||
Goodwill | 131,442 | 105,843 | $ 31,197 | |
Total assets | 1,974,610 | 1,727,181 | ||
Liabilities and Stockholders’ Equity: | ||||
Amount due on senior secured credit facility | 216,879 | 170,761 | ||
Accounts payable | 58,853 | 101,840 | ||
Manufacturer flooring plans payable | 25,201 | 23,666 | ||
Accrued expenses payable and other liabilities | 78,382 | 73,371 | ||
Dividends payable | 171 | 132 | ||
Senior unsecured notes, net | 945,566 | 944,780 | ||
Operating lease right-of-use liabilities | 159,265 | |||
Finance lease right-of-use liabilities | 550 | |||
Capital leases payable | 726 | |||
Deferred income taxes | 180,126 | 153,113 | ||
Deferred compensation payable | 2,098 | 1,989 | ||
Total liabilities | 1,667,091 | 1,470,378 | ||
Stockholders’ equity | 307,519 | 256,803 | $ 216,793 | $ 142,765 |
Total liabilities and stockholders’ equity | 1,974,610 | 1,727,181 | ||
Reportable Legal Entities [Member] | H & E Equipment Services [Member] | ||||
Assets: | ||||
Cash | 14,247 | 16,677 | ||
Receivables, net | 164,260 | 166,393 | ||
Inventories, net | 81,945 | 94,483 | ||
Prepaid expenses and other assets | 10,129 | 10,382 | ||
Rental equipment, net | 1,062,154 | 983,281 | ||
Property and equipment, net | 111,429 | 98,251 | ||
Operating lease right-of-use assets, net | 137,625 | |||
Deferred financing costs, net | 2,857 | 3,000 | ||
Investment in guarantor subsidiaries | 235,749 | 246,309 | ||
Intangible assets, net | 32,948 | 28,380 | ||
Goodwill | 101,916 | 76,317 | ||
Total assets | 1,955,259 | 1,723,473 | ||
Liabilities and Stockholders’ Equity: | ||||
Amount due on senior secured credit facility | 216,879 | 170,761 | ||
Accounts payable | 56,225 | 95,866 | ||
Manufacturer flooring plans payable | 25,201 | 23,178 | ||
Accrued expenses payable and other liabilities | 81,646 | 76,798 | ||
Dividends payable | 231 | 185 | ||
Senior unsecured notes, net | 945,566 | 944,780 | ||
Operating lease right-of-use liabilities | 139,768 | |||
Deferred income taxes | 180,126 | 153,113 | ||
Deferred compensation payable | 2,098 | 1,989 | ||
Total liabilities | 1,647,740 | 1,466,670 | ||
Stockholders’ equity | 307,519 | 256,803 | ||
Total liabilities and stockholders’ equity | 1,955,259 | 1,723,473 | ||
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | ||||
Assets: | ||||
Receivables, net | 27,944 | 35,163 | ||
Inventories, net | 3,533 | 10,115 | ||
Prepaid expenses and other assets | 133 | 126 | ||
Rental equipment, net | 155,519 | 158,217 | ||
Property and equipment, net | 19,135 | 16,870 | ||
Operating lease right-of-use assets, net | 18,945 | |||
Finance lease right-of-use assets, net | 365 | |||
Goodwill | 29,526 | 29,526 | ||
Total assets | 255,100 | 250,017 | ||
Liabilities and Stockholders’ Equity: | ||||
Accounts payable | 2,628 | 5,974 | ||
Manufacturer flooring plans payable | 488 | |||
Accrued expenses payable and other liabilities | (3,264) | (3,427) | ||
Dividends payable | (60) | (53) | ||
Operating lease right-of-use liabilities | 19,497 | |||
Finance lease right-of-use liabilities | 550 | |||
Capital leases payable | 726 | |||
Total liabilities | 19,351 | 3,708 | ||
Stockholders’ equity | 235,749 | 246,309 | ||
Total liabilities and stockholders’ equity | 255,100 | 250,017 | ||
Elimination [Member] | ||||
Assets: | ||||
Investment in guarantor subsidiaries | (235,749) | (246,309) | ||
Total assets | (235,749) | (246,309) | ||
Liabilities and Stockholders’ Equity: | ||||
Stockholders’ equity | (235,749) | (246,309) | ||
Total liabilities and stockholders’ equity | $ (235,749) | $ (246,309) |
Consolidating Financial Infor_4
Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Income (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | |||||||||||
Revenues | $ 348,133 | $ 352,997 | $ 333,597 | $ 313,638 | $ 345,974 | $ 322,141 | $ 310,364 | $ 260,482 | $ 1,348,365 | $ 1,238,961 | $ 1,030,019 |
Cost of revenues: | |||||||||||
Cost of revenues | 849,195 | 800,427 | 670,111 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 499,170 | 438,534 | 359,908 | ||||||||
Selling, general and administrative expenses | 311,026 | 278,298 | 232,784 | ||||||||
Impairment of goodwill | 12,200 | 12,184 | |||||||||
Merger costs (net of merger breakup fee proceeds) | 416 | 708 | (5,782) | ||||||||
Gain from sales of property and equipment, net | 4,617 | 7,118 | 5,009 | ||||||||
Income from operations | 41,310 | 55,503 | 47,673 | 35,675 | 50,899 | 45,318 | 43,103 | 27,326 | 180,161 | 166,646 | 137,915 |
Other income (expense): | |||||||||||
Interest expense | (68,277) | (63,707) | (54,958) | ||||||||
Loss on early extinguishment of debt | (25,363) | ||||||||||
Other, net | 3,977 | 1,724 | 1,750 | ||||||||
Total other expense, net | (64,300) | (61,983) | (78,571) | ||||||||
Income before provision (benefit) for income taxes | 26,854 | 38,760 | 30,895 | 19,352 | 34,755 | 28,971 | 27,869 | 13,068 | 115,861 | 104,663 | 59,344 |
Provision (Benefit) for income taxes | 28,650 | 28,040 | (50,314) | ||||||||
Net income | $ 21,923 | $ 28,431 | $ 22,614 | $ 14,243 | $ 25,060 | $ 21,314 | $ 20,771 | $ 9,478 | 87,211 | 76,623 | 109,658 |
Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,169,808 | 1,035,942 | 849,032 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 738,901 | 665,252 | 554,253 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 430,907 | 370,690 | 294,779 | ||||||||
Selling, general and administrative expenses | 270,533 | 232,892 | 190,392 | ||||||||
Impairment of goodwill | 12,184 | ||||||||||
Equity in earnings of guarantor subsidiaries | 15,441 | 13,247 | 16,136 | ||||||||
Merger costs (net of merger breakup fee proceeds) | 416 | 708 | (5,782) | ||||||||
Gain from sales of property and equipment, net | 3,957 | 6,475 | 2,435 | ||||||||
Income from operations | 167,172 | 156,812 | 128,740 | ||||||||
Other income (expense): | |||||||||||
Interest expense | (55,056) | (53,681) | (45,480) | ||||||||
Loss on early extinguishment of debt | (25,363) | ||||||||||
Other, net | 3,745 | 1,532 | 1,447 | ||||||||
Total other expense, net | (51,311) | (52,149) | (69,396) | ||||||||
Income before provision (benefit) for income taxes | 115,861 | 104,663 | 59,344 | ||||||||
Provision (Benefit) for income taxes | 28,650 | 28,040 | (50,314) | ||||||||
Net income | 87,211 | 76,623 | 109,658 | ||||||||
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 178,557 | 203,019 | 180,987 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 110,294 | 135,175 | 115,858 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 68,263 | 67,844 | 65,129 | ||||||||
Selling, general and administrative expenses | 40,493 | 45,406 | 42,392 | ||||||||
Gain from sales of property and equipment, net | 660 | 643 | 2,574 | ||||||||
Income from operations | 28,430 | 23,081 | 25,311 | ||||||||
Other income (expense): | |||||||||||
Interest expense | (13,221) | (10,026) | (9,478) | ||||||||
Other, net | 232 | 192 | 303 | ||||||||
Total other expense, net | (12,989) | (9,834) | (9,175) | ||||||||
Income before provision (benefit) for income taxes | 15,441 | 13,247 | 16,136 | ||||||||
Net income | 15,441 | 13,247 | 16,136 | ||||||||
Elimination [Member] | |||||||||||
Gross profit (loss): | |||||||||||
Equity in earnings of guarantor subsidiaries | (15,441) | (13,247) | (16,136) | ||||||||
Income from operations | (15,441) | (13,247) | (16,136) | ||||||||
Other income (expense): | |||||||||||
Income before provision (benefit) for income taxes | (15,441) | (13,247) | (16,136) | ||||||||
Net income | (15,441) | (13,247) | (16,136) | ||||||||
Equipment Rentals [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 766,354 | 627,181 | 508,121 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 419,472 | 353,422 | 294,599 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 346,882 | 273,759 | 213,522 | ||||||||
Equipment Rentals [Member] | Rentals Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 70,613 | 55,449 | 47,438 | ||||||||
Equipment Rentals [Member] | Rental Depreciation [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 243,780 | 208,453 | 169,455 | ||||||||
Equipment Rentals [Member] | Rental Expense [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 105,079 | 89,520 | 77,706 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 662,578 | 535,551 | 418,769 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 361,280 | 300,897 | 243,315 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 301,298 | 234,654 | 175,454 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | Rentals Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 59,543 | 46,039 | 38,228 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 103,776 | 91,630 | 89,352 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 58,192 | 52,525 | 51,284 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 45,584 | 39,105 | 38,068 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | Rentals Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 11,070 | 9,410 | 9,210 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Rental Depreciation [Member] | H & E Equipment Services [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 211,252 | 178,371 | 140,489 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Rental Depreciation [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 32,528 | 30,082 | 28,966 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Rental Expense [Member] | H & E Equipment Services [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 90,485 | 76,487 | 64,598 | ||||||||
Equipment Rentals [Member] | Reportable Legal Entities [Member] | Rental Expense [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 14,594 | 13,033 | 13,108 | ||||||||
New Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 239,091 | 262,948 | 203,301 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 211,372 | 232,057 | 180,702 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 27,719 | 30,891 | 22,599 | ||||||||
New Equipment Sales [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 213,877 | 207,564 | 166,730 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 189,045 | 183,164 | 148,163 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 24,832 | 24,400 | 18,567 | ||||||||
New Equipment Sales [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 25,214 | 55,384 | 36,571 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 22,327 | 48,893 | 32,539 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 2,887 | 6,491 | 4,032 | ||||||||
Used Equipment Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 139,349 | 125,125 | 107,329 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 92,021 | 86,052 | 74,132 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 47,328 | 39,073 | 33,197 | ||||||||
Used Equipment Sales [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 118,504 | 102,005 | 84,741 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 78,703 | 69,960 | 59,481 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 39,801 | 32,045 | 25,260 | ||||||||
Used Equipment Sales [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 20,845 | 23,120 | 22,588 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 13,318 | 16,092 | 14,651 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 7,527 | 7,028 | 7,937 | ||||||||
Parts Sales [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 123,855 | 120,454 | 114,253 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 90,963 | 88,263 | 83,135 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 32,892 | 32,191 | 31,118 | ||||||||
Parts Sales [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 107,160 | 103,586 | 97,852 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 79,196 | 76,425 | 71,603 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 27,964 | 27,161 | 26,249 | ||||||||
Parts Sales [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 16,695 | 16,868 | 16,401 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 11,767 | 11,838 | 11,532 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 4,928 | 5,030 | 4,869 | ||||||||
Services Revenues [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 67,941 | 63,488 | 62,873 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 21,946 | 21,328 | 21,111 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 45,995 | 42,160 | 41,762 | ||||||||
Services Revenues [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 57,835 | 53,534 | 52,807 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 18,870 | 18,100 | 17,851 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 38,965 | 35,434 | 34,956 | ||||||||
Services Revenues [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 10,106 | 9,954 | 10,066 | ||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 3,076 | 3,228 | 3,260 | ||||||||
Gross profit (loss): | |||||||||||
Gross profit | 7,030 | 6,726 | 6,806 | ||||||||
Other [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 11,775 | 39,765 | 34,142 | ||||||||
Other [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 9,854 | 33,702 | 28,133 | ||||||||
Other [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Revenues: | |||||||||||
Revenues | 1,921 | 6,063 | 6,009 | ||||||||
Other [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 13,421 | 19,305 | 16,432 | ||||||||
Other [Member] | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 11,807 | 16,706 | 13,840 | ||||||||
Other [Member] | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Cost of revenues: | |||||||||||
Cost of revenues | 1,614 | 2,599 | 2,592 | ||||||||
Other Gross Profit | |||||||||||
Gross profit (loss): | |||||||||||
Gross profit | (1,646) | 20,460 | 17,710 | ||||||||
Other Gross Profit | Reportable Legal Entities [Member] | H & E Equipment Services [Member] | |||||||||||
Gross profit (loss): | |||||||||||
Gross profit | (1,953) | 16,996 | 14,293 | ||||||||
Other Gross Profit | Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | |||||||||||
Gross profit (loss): | |||||||||||
Gross profit | $ 307 | $ 3,464 | $ 3,417 |
Consolidating Financial Infor_5
Consolidating Financial Information of Guarantor Subsidiaries - Condensed Consolidating Statement of Cash Flows (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||||
Net income | $ 87,211,000 | $ 76,623,000 | $ 109,658,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization on property and equipment | 28,425,000 | 24,593,000 | 23,790,000 | |
Depreciation on rental equipment | 243,780,000 | 208,453,000 | 169,455,000 | |
Amortization of intangible assets | 4,132,000 | 3,320,000 | 0 | |
Amortization of deferred financing costs | 1,010,000 | 1,083,000 | 1,046,000 | |
Accretion of note discount, net of premium amortization | 477,000 | 477,000 | 274,000 | |
Non-cash operating lease expense | 11,680,000 | |||
Amortization of finance lease right-of-use assets | 163,000 | |||
Provision for losses on accounts receivable | 5,793,000 | 2,741,000 | 3,932,000 | |
Provision for inventory obsolescence | 152,000 | 122,000 | 161,000 | |
Deferred income taxes | 27,013,000 | 26,695,000 | (50,535,000) | |
Impairment of goodwill | $ 12,200,000 | 12,184,000 | ||
Stock-based compensation expense | 4,670,000 | 4,214,000 | 3,526,000 | |
Loss on early extinguishment of debt | 25,363,000 | |||
Gain from sales of property and equipment, net | (4,617,000) | (7,118,000) | (5,009,000) | |
Gain from sales of rental equipment, net | (46,613,000) | (38,352,000) | (31,882,000) | |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Receivables | 9,222,000 | (17,761,000) | (40,012,000) | |
Inventories | (19,637,000) | (48,230,000) | (31,771,000) | |
Prepaid expenses and other assets | 267,000 | (965,000) | (1,659,000) | |
Accounts payable | (43,358,000) | 6,994,000 | 50,349,000 | |
Manufacturer flooring plans payable | 1,535,000 | 1,664,000 | (8,778,000) | |
Accrued expenses payable and other liabilities | (4,380,000) | 2,572,000 | 8,230,000 | |
Deferred compensation payable | 109,000 | 86,000 | 61,000 | |
Net cash provided by operating activities | 319,218,000 | 247,211,000 | 226,199,000 | |
Cash flows from investing activities: | ||||
Acquisition of business, net of cash acquired | (106,746,000) | (196,027,000) | ||
Purchases of property and equipment | (43,111,000) | (34,960,000) | (22,515,000) | |
Purchases of rental equipment | (309,654,000) | (416,600,000) | (234,209,000) | |
Proceeds from sales of property and equipment | 6,050,000 | 9,261,000 | 7,506,000 | |
Proceeds from sales of rental equipment | 127,558,000 | 112,086,000 | 96,143,000 | |
Net cash used in investing activities | (325,903,000) | (526,240,000) | (153,075,000) | |
Cash flows from financing activities: | ||||
Purchases of treasury stock | (1,684,000) | (1,350,000) | (783,000) | |
Borrowings on senior secured credit facility | 1,457,744,000 | 1,436,849,000 | 1,193,544,000 | |
Payments on senior secured credit facility | (1,411,626,000) | (1,266,088,000) | (1,356,186,000) | |
Dividends paid | (39,388,000) | (39,274,000) | (39,172,000) | |
Principal payments on senior unsecured notes due 2022 | (630,000,000) | |||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336,000) | |||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500,000 | |||
Payments of deferred financing costs | (559,000) | (97,000) | (17,278,000) | |
Payments of finance lease obligations | (232,000) | |||
Payments of capital lease obligations | (212,000) | (218,000) | ||
Net cash provided by financing activities | 4,255,000 | 129,828,000 | 85,071,000 | |
Net increase (decrease) in cash | (2,430,000) | (149,201,000) | 158,195,000 | |
Cash, beginning of year | 16,677,000 | 165,878,000 | 7,683,000 | |
Cash, end of year | 14,247,000 | 14,247,000 | 16,677,000 | 165,878,000 |
Reportable Legal Entities [Member] | H & E Equipment Services [Member] | ||||
Cash flows from operating activities: | ||||
Net income | 87,211,000 | 76,623,000 | 109,658,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization on property and equipment | 25,058,000 | 21,570,000 | 20,742,000 | |
Depreciation on rental equipment | 211,252,000 | 178,371,000 | 140,489,000 | |
Amortization of intangible assets | 4,132,000 | 3,320,000 | ||
Amortization of deferred financing costs | 1,010,000 | 1,083,000 | 1,046,000 | |
Accretion of note discount, net of premium amortization | 477,000 | 477,000 | 274,000 | |
Non-cash operating lease expense | 10,306,000 | |||
Provision for losses on accounts receivable | 5,382,000 | 2,065,000 | 3,148,000 | |
Provision for inventory obsolescence | 152,000 | 122,000 | 161,000 | |
Deferred income taxes | 27,013,000 | 26,695,000 | (50,535,000) | |
Impairment of goodwill | 12,184,000 | |||
Stock-based compensation expense | 4,670,000 | 4,214,000 | 3,526,000 | |
Loss on early extinguishment of debt | 25,363,000 | |||
Gain from sales of property and equipment, net | (3,957,000) | (6,475,000) | (2,435,000) | |
Gain from sales of rental equipment, net | (39,102,000) | (31,595,000) | (24,063,000) | |
Equity in earnings of guarantor subsidiaries | (15,441,000) | (13,247,000) | (16,136,000) | |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Receivables | 2,414,000 | (19,346,000) | (29,083,000) | |
Inventories | (21,121,000) | (45,349,000) | (23,221,000) | |
Prepaid expenses and other assets | 274,000 | (981,000) | (1,687,000) | |
Accounts payable | (40,012,000) | 11,990,000 | 42,623,000 | |
Manufacturer flooring plans payable | 2,023,000 | 2,878,000 | (10,599,000) | |
Accrued expenses payable and other liabilities | (3,597,000) | 4,176,000 | 8,660,000 | |
Deferred compensation payable | 109,000 | 86,000 | 61,000 | |
Net cash provided by operating activities | 270,437,000 | 216,677,000 | 197,992,000 | |
Cash flows from investing activities: | ||||
Acquisition of business, net of cash acquired | (106,746,000) | (196,027,000) | ||
Purchases of property and equipment | (36,824,000) | (26,903,000) | (17,852,000) | |
Purchases of rental equipment | (272,015,000) | (362,780,000) | (198,988,000) | |
Proceeds from sales of property and equipment | 5,276,000 | 8,617,000 | 3,528,000 | |
Proceeds from sales of rental equipment | 107,127,000 | 92,014,000 | 74,090,000 | |
Investment in subsidiaries | 26,001,000 | (10,845,000) | 14,128,000 | |
Net cash used in investing activities | (277,181,000) | (495,924,000) | (125,094,000) | |
Cash flows from financing activities: | ||||
Purchases of treasury stock | (1,684,000) | (1,350,000) | (783,000) | |
Borrowings on senior secured credit facility | 1,457,744,000 | 1,436,849,000 | 1,193,544,000 | |
Payments on senior secured credit facility | (1,411,626,000) | (1,266,088,000) | (1,356,186,000) | |
Dividends paid | (39,381,000) | (39,268,000) | (39,164,000) | |
Principal payments on senior unsecured notes due 2022 | (630,000,000) | |||
Costs paid to tender and redeem senior unsecured notes due 2022 | (23,336,000) | |||
Proceeds from issuance of senior unsecured notes due 2025 | 958,500,000 | |||
Payments of deferred financing costs | (559,000) | (97,000) | (17,278,000) | |
Payments of finance lease obligations | (56,000) | |||
Net cash provided by financing activities | 4,438,000 | 130,046,000 | 85,297,000 | |
Net increase (decrease) in cash | (2,306,000) | (149,201,000) | 158,195,000 | |
Cash, beginning of year | 16,677,000 | 165,878,000 | 7,683,000 | |
Cash, end of year | 14,371,000 | 14,371,000 | 16,677,000 | 165,878,000 |
Reportable Legal Entities [Member] | Guarantor Subsidiaries [Member] | ||||
Cash flows from operating activities: | ||||
Net income | 15,441,000 | 13,247,000 | 16,136,000 | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization on property and equipment | 3,367,000 | 3,023,000 | 3,048,000 | |
Depreciation on rental equipment | 32,528,000 | 30,082,000 | 28,966,000 | |
Non-cash operating lease expense | 1,374,000 | |||
Amortization of finance lease right-of-use assets | 163,000 | |||
Provision for losses on accounts receivable | 411,000 | 676,000 | 784,000 | |
Gain from sales of property and equipment, net | (660,000) | (643,000) | (2,574,000) | |
Gain from sales of rental equipment, net | (7,511,000) | (6,757,000) | (7,819,000) | |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Receivables | 6,808,000 | 1,585,000 | (10,929,000) | |
Inventories | 1,484,000 | (2,881,000) | (8,550,000) | |
Prepaid expenses and other assets | (7,000) | 16,000 | 28,000 | |
Accounts payable | (3,346,000) | (4,996,000) | 7,726,000 | |
Manufacturer flooring plans payable | (488,000) | (1,214,000) | 1,821,000 | |
Accrued expenses payable and other liabilities | (783,000) | (1,604,000) | (430,000) | |
Net cash provided by operating activities | 48,781,000 | 30,534,000 | 28,207,000 | |
Cash flows from investing activities: | ||||
Purchases of property and equipment | (6,287,000) | (8,057,000) | (4,663,000) | |
Purchases of rental equipment | (37,639,000) | (53,820,000) | (35,221,000) | |
Proceeds from sales of property and equipment | 774,000 | 644,000 | 3,978,000 | |
Proceeds from sales of rental equipment | 20,431,000 | 20,072,000 | 22,053,000 | |
Net cash used in investing activities | (22,721,000) | (41,161,000) | (13,853,000) | |
Cash flows from financing activities: | ||||
Dividends paid | (7,000) | (6,000) | (8,000) | |
Payments of finance lease obligations | (176,000) | |||
Payments of capital lease obligations | (212,000) | (218,000) | ||
Capital contributions | (26,001,000) | 10,845,000 | (14,128,000) | |
Net cash provided by financing activities | (26,184,000) | 10,627,000 | (14,354,000) | |
Net increase (decrease) in cash | (124,000) | |||
Cash, end of year | $ (124,000) | (124,000) | ||
Elimination [Member] | ||||
Cash flows from operating activities: | ||||
Net income | (15,441,000) | (13,247,000) | (16,136,000) | |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Equity in earnings of guarantor subsidiaries | 15,441,000 | 13,247,000 | 16,136,000 | |
Cash flows from investing activities: | ||||
Investment in subsidiaries | (26,001,000) | 10,845,000 | (14,128,000) | |
Net cash used in investing activities | (26,001,000) | 10,845,000 | (14,128,000) | |
Cash flows from financing activities: | ||||
Capital contributions | 26,001,000 | (10,845,000) | 14,128,000 | |
Net cash provided by financing activities | $ 26,001,000 | $ (10,845,000) | $ 14,128,000 |
Valuation and Qualifying Acco_2
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | $ 4,462 | $ 4,721 | $ 4,669 |
Additions Charged to Costs and Expenses | 5,945 | 2,863 | 4,093 |
Deductions | (4,840) | (3,122) | (4,041) |
Balance at End of Year | 5,567 | 4,462 | 4,721 |
Allowance for doubtful accounts receivable [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 4,094 | 3,774 | 3,769 |
Additions Charged to Costs and Expenses | 5,793 | 2,741 | 3,932 |
Deductions | (4,651) | (2,421) | (3,927) |
Balance at End of Year | 5,236 | 4,094 | 3,774 |
Allowance for inventory obsolescence [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Year | 368 | 947 | 900 |
Additions Charged to Costs and Expenses | 152 | 122 | 161 |
Deductions | (189) | (701) | (114) |
Balance at End of Year | $ 331 | $ 368 | $ 947 |