Exhibit 99.1
ESSEX RENTAL CORP. REPORTS 2011 FOURTH QUARTER AND YEAR-END RESULTS
BUFFALO GROVE, IL – March 12, 2012 –Essex Rental Corp. (Nasdaq: ESSX) ("Essex")today announced its unaudited consolidated results for the fourth quarter and year ended December 31, 2011.
Fourth Quarter and Year-End 2011 Highlights
| · | Crawler crane utilization increased to 39.8% for the year ended December 31, 2011 from 37.5% for the year ended December 31, 2010; |
| · | Average monthly crawler crane rental rates increased by $523 to $16,391 for the three month period ended December 31, 2011 from $15,868 for the quarter ended September 30, 2011. Crawler crane utilization decreased slightly over the same period from 39.5% to 38.3%; |
| · | For the year ended December 31, 2011, utilization on our rough terrain fleet was 62.0% validating our strategy of increasing the number of units in this segment of our rental fleet by 25.5% during the preceding 12 months; |
| · | Utilization rates for our self erecting tower cranes remained relatively flat on a sequential quarter over quarter basis while utilization on larger tower cranes improved 2.5% over the same period and on certain units is approaching 60%; and |
| · | New, used and rental equipment sales totaled $5.4 million for the three month period ended December 31, 2011, a 6.9% decrease from $5.8 million for the three month period ended September 30, 2011. |
CEO Comments
Ron Schad, President and CEO of Essex stated, “During the fourth quarter of 2011 we generated results that were consistent with the business levels that we have experienced throughout the entire year. Rental rates continue to be stable and on a full year basis we achieved a 2.3% increase in crawler crane utilization from 37.5% in 2010 to 39.8% in 2011. We are continuing to focus on selling rental fleet assets with low utilization such as certain classes of crawler cranes and other non-core assets with shorter economic lives, which we believe generate a return of capital instead of a return on capital. These non-core assets that were acquired as part of the Coast Acquisition include aerial work platforms and forklifts. Following the implementation of our IT systems at Coast, we commenced a number of proactive initiatives which are aimed at enhancing both our equipment rental and our parts and service profitability. We have also successfully completed the consolidation of Coast’s finance and accounting functions within our Buffalo Grove, Illinois headquarters. We expect that this consolidation will generate approximately $350,000 in annual savings.”
Fourth Quarter 2011 Overview
Equipment rentals segment revenues, which represent 73.8% of total revenues, were $16.6 million for the three months ended December 31, 2011, versus $14.4 million for the three months ended September 30, 2011. Equipment rentals segment revenues include rental, transportation, used rental equipment sales and repairs and maintenance of rental equipment. The 15.1% sequential quarter increase in equipment rentals segment revenues was primarily due to an increase in used rental equipment sales of $2.2 million. Proceeds from used rental equipment sales were used to purchase new rough terrain cranes and boom trucks, as we are growing these asset classes within of our rental equipment fleet.
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Equipment distribution revenue, which includes the retail distribution of new and used equipment, but excludes the proceeds received from the sale of used rental equipment, was $2.1 million for the three months ended December 31, 2011 compared to $4.8 million for the three months ended September 30, 2011. Equipment distribution revenue was 9.5% of total revenues for the three months ended December 31, 2011 as compared to 20.5% of total revenues for the three months ended September 30, 2011. While we have experienced an improvement in quoting and a growing sales backlog, some orders that we have in hand have been delayed until the first half of 2012.
Parts and service revenue was $3.7 million or 16.6% of total revenues for the three months ended December 31, 2011 as compared to $4.1 million or 17.6% of total revenues for the three months ended September 30, 2011.
Gross profit declined $0.3 million to $3.3 million for the quarter ended December 31, 2011 from $3.6 million the quarter ended September 30, 2011. Gross profit margin declined by approximately 0.8% to 14.6% for the quarter ended December 31, 2011 from 15.4% for the quarter ended September 30, 2011.
Total EBITDA excluding approximately $0.7 million for non cash compensation and one-time acquisition related expenses was $2.1 million for the quarter ended December 31, 2011 compared to $2.4 million for the quarter ended December 31, 2010.EBITDA before both rental equipment sales andapproximately $0.7 million for non cash compensation and one-time acquisition related expenses was $1.6 million for the quarter ended December 31, 2011 as compared to $2.3 million as measured on the same basis for the quarter ended December 31, 2010.
Outlook for 2012
Mr. Schad continued, “As we noted in our third quarter earnings release, our monthly crawler crane bookings were pointing towards modest utilization improvements. This trend has accelerated somewhat. Specifically, for the five month period ended February 29, 2012, our expected revenues from signed bookings are up approximately 55.5% as compared to the same prior year period. Expected revenues are up 24.4% as compared to same period two years ago after excluding the orders of crawler cranes for levee work. Equally as important, the lease duration of bookings during the five months ended February 29, 2012 increased by over 1.8 months per order versus the five month period ended February 28, 2011. Historically, as lease duration increases, our average utilization generally improves. The number of orders that we booked during the five month period ended February 29, 2012 was the highest since the five month period ended February 29, 2008. We would expect that consistent with previous cycles, given the nature of our equipment, an increase in our bookings typically lags that of general construction equipment rental companies by 6 to 12 months. As a result of the improvement in bookings, we expect to see increasing rental revenues during 2012.”
“On a very selective basis we are beginning to increase rental rates on certain crawler crane asset classes where utilization exceeds 60%. In addition, we expect that our investment of approximately $24 million in new equipment during 2011, primarily in rough terrain cranes and boom trucks, the majority of which we received during the latter half of the year, will contribute to improved rental revenues in 2012. This equipment is specifically focused on increasing our rental capacity in the asset classes where we have experienced the highest utilization of our rental fleet. We believe that as these assets are deployed, they will be a near-term catalyst for growing our revenue stream.”
“We are continuing to capitalize on the increase in inquiries about purchasing used rental equipment. Specifically, we are focusing on selling classes of crawler cranes with low utilization and other non-core rental assets including aerial work platform equipment and forklifts that were part of the Coast acquisition rental fleet. To date in 2012, we have received proceeds of approximately $3 million related to the sale of these non-core assets and used the proceeds to repay debt.”
“Lastly, we have launched a number of operating initiatives at Coast to improve both equipment rental and parts and service profitability. We are optimistic that if we are successful at achieving these initiatives we can significantly improve the profitability of each of these discreet segments of Coast’s business.”
Mr. Schad concluded, “As of December 31, 2011, Essex had approximately $48 million of liquidity, consisting of $9 million in cash and amounts available under our revolving credit facilities. The decline in liquidity as compared to September 30, 2011 is almost entirely related to the addition of $10 million of new equipment in the quarter. Additionally, we have approximately $6 million of borrowing base assets in excess of our total revolving credit facility limits.”
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Conference Call
Essex’s management team will conduct a conference call to discuss the operating results at 9:00 a.m. ET on Tuesday, March 13,2012. Interested parties may participate in the call by dialing (877) 407-8291 (Domestic) and (201) 689-8345 (International). Please call in 10 minutes before the call is scheduled to begin, and ask for the Essex Rental Corp. call.
The conference call will be webcast live via the Investor Relations section ("Events and Presentations") of the Essex Rental Corp. website atwww.essexrentalcorp.com. To listen to the live call, please go to the website at least 15 minutes early to register, download and install any necessary audio software. If you are unable to listen live, the conference call will be archived on the website.
About Essex Rental Corp.
Essex, through its subsidiaries, Essex Crane Rental Corp. and Coast Crane Company, is one of North America's largest providers of rental and distribution for mobile cranes (including lattice-boom crawler cranes, truck cranes and rough terrain cranes), self-erecting cranes, stationary tower cranes, elevators and hoists, and other lifting equipment used in a wide array of construction projects. In addition, the Company provides product support including installation, maintenance, repair, and parts and services for equipment provided and other equipment used by its construction industry customers. With a fleet of over 1,000 cranes and other construction equipment and unparalleled customer service and support, Essex supplies a wide variety of innovative lifting solutions for construction projects related to power generation, petro-chemical, refineries, water treatment and purification, bridges, highways, hospitals, shipbuilding, offshore oil fabrication and industrial plants, and commercial and residential construction.
Some of the statements in this press release and other written and oral statements made from time to time by Essex and its representatives are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include statements regarding the intent and belief or current expectations of Essex and its management team and may be identified by the use of words like "anticipate", "believe", "estimate", "expect", "intend", "may", "plan", "will", "should", "seek", the negative of these terms or other comparable terminology. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those projected in the forward-looking statements. Important factors that could cause actual results to differ materially from Essex's expectations include, without limitation, the continued ability of Essex to successfully execute its business plan, the possibility of a change in demand for the products and services that Essex provides, intense competition which may require us to lower prices or offer more favorable terms of sale, our reliance on third party suppliers, our indebtedness which could limit our operational and financial flexibility, global economic factors including interest rates, general economic conditions, geopolitical events and regulatory changes, our dependence on our management team and key personnel, as well as other relevant risks detailed in our Annual Report on Form 10-K/A and other periodic reports filed with the Securities and Exchange Commission and available on our website, www.essexcrane.com. The factors listed here are not exhaustive. Many of these uncertainties and risks are difficult to predict and beyond management's control. Forward-looking statements are not guarantees of future performance, results or events. Essex assumes no obligation to update or supplement forward-looking information in this press release whether to reflect changed assumptions, the occurrence of unanticipated events or changes in future operating results or financial conditions, or otherwise.
This press release includes references to EBITDA before rental equipment sales, an unaudited financial measure of performance which is not calculated in accordance with generally accepted accounting principles, or GAAP. While management believes that the presentation of EBITDA before rental equipment sales serves to enhance understanding of Essex's operating performance, EBITDA before rental equipment sales should be considered in addition to, but not as substitutes for, or more meaningful than, income from operations, the most directly comparable GAAP measures, as an indicator of Essex's operating performance. EBITDA before rental equipment sales has been presented as a supplemental disclosure because EBITDA is a widely used measure of performance and basis for valuation. A reconciliation of EBITDA before rental equipment sales to income from operations is included in the financial tables accompanying this release.
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CONTACT:
Essex Rental Corp.
Martin Kroll
Chief Financial Officer
(847) 215-6502 /mkroll@essexcrane.com
OR
Kory Glen
Director of Finance
(847) 215-6522 /kglen@essexcrane.com
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| Essex Rental Corp. and Subsidiaries | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| REVENUES | ||||||||||||||||||
| Equipment rentals | $ | 10,711,093 | $ | 8,142,374 | $ | 41,970,190 | $ | 25,049,779 | ||||||||||
| Retail equipment sales | 2,142,662 | 1,238,722 | 14,206,479 | 1,238,722 | ||||||||||||||
| Used rental equipment sales | 3,282,153 | 1,317,301 | 6,523,789 | 4,255,761 | ||||||||||||||
| Retail parts sales | 2,092,091 | 1,184,042 | 9,834,844 | 1,184,042 | ||||||||||||||
| Transportation | 1,395,229 | 1,616,745 | 5,413,609 | 4,766,328 | ||||||||||||||
| Equipment repairs and maintenance | 2,846,303 | 1,927,347 | 11,636,068 | 5,036,828 | ||||||||||||||
| TOTAL REVENUES | 22,469,531 | 15,426,531 | 89,584,979 | 41,531,460 | ||||||||||||||
| COST OF REVENUES | ||||||||||||||||||
| Salaries, payroll taxes and benefits | 3,148,977 | 1,843,270 | 10,635,150 | 5,905,279 | ||||||||||||||
| Depreciation | 5,470,307 | 4,033,476 | 21,146,477 | 12,723,951 | ||||||||||||||
| Retail equipment sales | 1,792,335 | 994,119 | 11,878,546 | 994,119 | ||||||||||||||
| Used rental equipment sales | 2,765,160 | 1,201,910 | 5,462,818 | 3,551,891 | ||||||||||||||
| Retail parts sales | 1,564,411 | 775,338 | 7,230,864 | 775,338 | ||||||||||||||
| Transportation | 1,225,190 | 1,413,365 | 5,081,504 | 4,236,326 | ||||||||||||||
| Equipment repairs and maintenance | 2,511,972 | 2,475,657 | 12,452,736 | 5,833,945 | ||||||||||||||
| Yard operating expenses | 700,026 | 386,876 | 2,599,646 | 1,383,068 | ||||||||||||||
| TOTAL COST OF REVENUES | 19,178,378 | 13,124,011 | 76,487,741 | 35,403,917 | ||||||||||||||
| GROSS PROFIT | 3,291,153 | 2,302,520 | 13,097,238 | 6,127,543 | ||||||||||||||
| Selling, general and administrative expenses | 7,381,670 | 5,113,701 | 28,535,612 | 12,964,887 | ||||||||||||||
| Other depreciation and amortization | 352,910 | 326,112 | 1,338,378 | 954,602 | ||||||||||||||
| LOSS FROM OPERATIONS | (4,443,427 | ) | (3,137,293 | ) | (16,776,752 | ) | (7,791,946 | ) | ||||||||||
| OTHER INCOME (EXPENSES) | ||||||||||||||||||
| Other income | 2,084 | 62,706 | 316,492 | 72,278 | ||||||||||||||
| Interest expense | (2,915,480 | ) | (2,200,190 | ) | (11,455,390 | ) | (7,209,449 | ) | ||||||||||
| Foreign currency exchange gains/(losses) | 2,559 | (2,471 | ) | (6,999 | ) | (2,471 | ) | |||||||||||
| TOTAL OTHER INCOME (EXPENSES) | (2,910,837 | ) | (2,139,955 | ) | (11,145,897 | ) | (7,139,642 | ) | ||||||||||
| LOSS BEFORE INCOME TAXES | (7,354,264 | ) | (5,277,248 | ) | (27,922,649 | ) | (14,931,588 | ) | ||||||||||
| PROVISION (BENEFIT) FOR INCOME TAXES | (3,049,182 | ) | (290,219 | ) | (10,775,749 | ) | (3,523,102 | ) | ||||||||||
| NET LOSS | $ | (4,305,082 | ) | $ | (4,987,029 | ) | $ | (17,146,900 | ) | $ | (11,408,486 | ) | ||||||
| Weighted average shares outstanding: | ||||||||||||||||||
| Basic | 24,428,092 | 18,530,159 | 23,824,119 | 16,102,339 | ||||||||||||||
| Diluted | 24,428,092 | 18,530,159 | 23,824,119 | 16,102,339 | ||||||||||||||
| Loss per share: | ||||||||||||||||||
| Basic | $ | (0.18 | ) | $ | (0.27 | ) | $ | (0.72 | ) | $ | (0.71 | ) | ||||||
| Diluted | $ | (0.18 | ) | $ | (0.27 | ) | $ | (0.72 | ) | $ | (0.71 | ) | ||||||
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| Essex Rental Corp. & Subsidiaries | ||||||||||||||||
| Segment Revenues and Gross Profit | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Segment revenues | ||||||||||||||||
| Equipment rentals | $ | 16,591,029 | $ | 12,181,385 | $ | 58,859,497 | $ | 38,286,314 | ||||||||
| Equipment distribution | 2,142,662 | 1,238,722 | 14,206,479 | 1,238,722 | ||||||||||||
| Parts and service | 3,735,840 | 2,006,424 | 16,519,003 | 2,006,424 | ||||||||||||
| Total revenues | $ | 22,469,531 | $ | 15,426,531 | $ | 89,584,979 | $ | 41,531,460 | ||||||||
| Segment gross profit | ||||||||||||||||
| Equipment rentals | $ | 2,711,302 | $ | 1,425,700 | $ | 8,470,103 | $ | 5,250,723 | ||||||||
| Equipment distribution | 183,901 | 170,019 | 1,607,733 | 170,019 | ||||||||||||
| Parts and service | 395,950 | 706,801 | 3,019,402 | 706,801 | ||||||||||||
| Total gross profit | $ | 3,291,153 | $ | 2,302,520 | $ | 13,097,238 | $ | 6,127,543 | ||||||||
| Three Months Ended December 31, | Three Months Ended September 30, | |||||||||||||||
| 2011 | 2011 | |||||||||||||||
| Segment revenues | ||||||||||||||||
| Equipment rentals | $ | 16,591,029 | $ | 14,414,065 | ||||||||||||
| Equipment distribution | 2,142,662 | 4,774,162 | ||||||||||||||
| Parts and service | 3,735,840 | 4,095,546 | ||||||||||||||
| Total revenues | $ | 22,469,531 | $ | 23,283,773 | ||||||||||||
| Segment gross profit | ||||||||||||||||
| Equipment rentals | $ | 2,711,302 | $ | 2,217,565 | ||||||||||||
| Equipment distribution | 183,901 | 636,249 | ||||||||||||||
| Parts and service | 395,950 | 743,450 | ||||||||||||||
| Total gross profit | $ | 3,291,153 | $ | 3,597,264 | ||||||||||||
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| Essex Rental Corp & Subsidiaries | ||||||||||||||||
| Reconciliation of Loss from Operations | ||||||||||||||||
| to Total EBITDA and EBITDA before Rental Equipment Sales | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended December 31, | Year Ended December 31, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
| Loss from Operations | $ | (4,443,427 | ) | $ | (3,137,293 | ) | $ | (16,776,752 | ) | $ | (7,791,946 | ) | ||||
| Add: Depreciation | 5,470,307 | 4,033,476 | 21,146,477 | 12,723,951 | ||||||||||||
| Add: Other depreciation and amortization | 352,910 | 326,112 | 1,338,378 | 954,602 | ||||||||||||
| Total EBITDA | 1,379,790 | 1,222,295 | 5,708,103 | 5,886,607 | ||||||||||||
| Minus: Used rental equipment sales | (3,282,153 | ) | (1,317,301 | ) | (6,523,789 | ) | (4,255,761 | ) | ||||||||
| Add: Costs of used rental equipment sales | 2,765,160 | 1,201,910 | 5,462,818 | 3,551,891 | ||||||||||||
| EBITDA before rental equipment sales | $ | 862,797 | $ | 1,106,904 | $ | 4,647,132 | $ | 5,182,737 | ||||||||
| Three Months Ended December 31, | Three Months Ended September 30, | |||||||||||||||
| 2011 | 2011 | |||||||||||||||
| Loss from Operations | $ | (4,443,427 | ) | $ | (3,361,021 | ) | ||||||||||
| Add: Depreciation | 5,470,307 | 5,297,958 | ||||||||||||||
| Add: Other depreciation and amortization | 352,910 | 343,538 | ||||||||||||||
| Total EBITDA | 1,379,790 | 2,280,475 | ||||||||||||||
| Minus: Used rental equipment sales | (3,282,153 | ) | (1,050,861 | ) | ||||||||||||
| Add: Costs of used rental equipment sales | 2,765,160 | 806,320 | ||||||||||||||
| EBITDA before rental equipment sales | $ | 862,797 | $ | 2,035,934 | ||||||||||||
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| Essex Rental Corp. and Subsidiaries | ||||||||
| Consolidated Balance Sheets | ||||||||
| December 31, | December 31, | |||||||
| 2011 | 2010 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | 9,030,383 | $ | 3,474,314 | ||||
| Accounts receivable, net of allowances | 14,311,343 | 12,801,772 | ||||||
| Other receivables | 2,712,353 | 4,223,435 | ||||||
| Deferred tax assets | 3,478,114 | 2,402,709 | ||||||
| Inventory | ||||||||
| Retail equipment inventory | 2,212,530 | 5,386,074 | ||||||
| Retail spare parts, net | 1,506,680 | 1,882,003 | ||||||
| Prepaid expenses and other assets | 1,944,068 | 3,069,976 | ||||||
| TOTAL CURRENT ASSETS | 35,195,471 | 33,240,283 | ||||||
| Rental equipment, net | 328,955,023 | 330,378,792 | ||||||
| Property and equipment, net | 7,876,432 | 8,727,456 | ||||||
| Spare parts inventory, net | 3,380,090 | 3,540,360 | ||||||
| Identifiable finite lived intangibles, net | 1,893,920 | 3,143,063 | ||||||
| Goodwill | 1,796,126 | 1,796,126 | ||||||
| Loan acquisition costs, net | 1,803,167 | 2,220,878 | ||||||
| TOTAL ASSETS | $ | 380,900,229 | $ | 383,046,958 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Accounts payable | $ | 4,893,500 | $ | 2,810,672 | ||||
| Accrued employee compensation and benefits | 1,750,956 | 1,482,747 | ||||||
| Accrued taxes | 3,592,912 | 4,504,765 | ||||||
| Accrued interest | 833,642 | 436,947 | ||||||
| Accrued other expenses | 830,295 | 1,836,246 | ||||||
| Unearned rental revenue | 1,106,781 | 1,272,847 | ||||||
| Customer deposits | 142,581 | 2,320,007 | ||||||
| Short-term debt obligations | 673,403 | 783,243 | ||||||
| Interest rate swaps | 2,470,779 | - | ||||||
| Current portion of capital lease obligation | 7,199 | 6,718 | ||||||
| TOTAL CURRENT LIABILITIES | 16,302,048 | 15,454,192 | ||||||
| LONG-TERM LIABILITIES | ||||||||
| Revolving credit facilities | 222,088,941 | 214,959,971 | ||||||
| Promissory notes | 5,034,741 | 4,938,611 | ||||||
| Other long-term debt obligations | 1,851,859 | 2,982,920 | ||||||
| Deferred tax liabilities | 51,650,482 | 61,124,038 | ||||||
| Interest rate swaps | - | 5,266,586 | ||||||
| Capital lease obligation | 3,150 | 10,349 | ||||||
| TOTAL LONG-TERM LIABILITIES | 280,629,173 | 289,282,475 | ||||||
| TOTAL LIABILITIES | 296,931,221 | 304,736,667 | ||||||
| Commitments and Contingencies | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock, $.0001 par value, Authorized 1,000,000 shares, none issued | - | - | ||||||
| Common stock, $.0001 par value, Authorized 40,000,000 shares; | ||||||||
| issued and outstanding 24,428,092 shares at December 30, 2011 | ||||||||
| and 20,472,489 shares at December 31, 2010 | 2,443 | 2,047 | ||||||
| Paid in capital | 122,815,398 | 101,052,367 | ||||||
| Accumulated deficit | (37,577,983 | ) | (20,431,083 | ) | ||||
| Accumulated other comprehensive loss, net of tax | (1,270,850 | ) | (2,313,040 | ) | ||||
| TOTAL STOCKHOLDERS' EQUITY | 83,969,008 | 78,310,291 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 380,900,229 | $ | 383,046,958 | ||||
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