Summary
United Rentals, Inc. (URI) reported its 2010 annual results, indicating a challenging year that nevertheless showed signs of recovery in the latter half. Total revenues decreased slightly year-over-year, primarily due to significant drops in used equipment sales and contractor supplies. However, equipment rental revenue saw a modest increase, driven by higher equipment utilization, which the company attributed to a broader economic improvement. The company continued its strategic focus on optimizing its fleet, strengthening customer service, and controlling costs, including headcount reductions and branch network optimization. Financially, URI demonstrated progress in managing its debt structure, successfully issuing new notes and using proceeds to retire existing debt, thereby improving its debt maturity profile. Despite a net loss for the year, the company generated positive free cash flow, underscoring its operational efficiency. The outlook for 2011 was cautiously optimistic, with expectations of continued modest growth in key end markets, particularly U.S. non-residential construction. Investors should note the company's high leverage and the ongoing sensitivity of its business to economic cycles.
Financial Highlights
49 data points| Revenue | $2.24B |
| Cost of Revenue | $1.58B |
| Gross Profit | $658.00M |
| SG&A Expenses | $367.00M |
| Operating Income | $197.00M |
| Net Income | -$26.00M |
| EPS (Basic) | $-0.44 |
| EPS (Diluted) | $-0.44 |
| Shares Outstanding (Basic) | 60.45M |
| Shares Outstanding (Diluted) | 60.45M |
Key Highlights
- 1Total revenues for 2010 were $2.24 billion, a slight decrease from $2.36 billion in 2009, primarily driven by lower sales of used equipment and contractor supplies.
- 2Equipment rental revenue remained relatively flat at $1.83 billion, with a 4.3% increase in the volume of equipment on rent offset by a 2.1% decrease in rental rates.
- 3The company generated $227 million in free cash flow in 2010, a decrease from $367 million in 2009, reflecting increased capital expenditures for fleet replenishment.
- 4United Rentals reduced its headcount by approximately 700 employees and closed 49 branches in 2010 as part of ongoing cost-saving and optimization efforts.
- 5The company successfully issued $750 million in Senior Subordinated Notes and used proceeds to retire existing debt, improving its debt maturity profile.
- 6National Account customer revenue increased to 31% of total equipment rental revenue in 2010, up from 27% in 2009, indicating a successful push towards larger, more stable client relationships.
- 7The company reported a net loss of $26 million ($0.44 per share) for 2010, an improvement from a net loss of $62 million ($1.02 per share) in 2009.