10.08.2008

Essex Crane up 24%

Essex Crane, the US based crawler crane rental company has announced its first half results which show revenues of $42.1 million, an increase of over 28 percent. Of this $29.7 million was derived from crane rental, an increase of over 32 percent on the same period in 2007. The balance of revenues came form transport, maintenance/repair and sales of used equipment.

Utilisation during the period (using the “days” method of calculation), totaled 72.1 percent up from 69.7 percent in the first half of last year. Gross margins were $23.8 million an increase of over 39 percent while SG&A costs dropped as a percentage of sales from 14.2 percent to 14.1 percent.

Income from operations was $17.8 million an increase of over 50 percent on last year. The company has also reported that its rental backlog is $43.4 million up from $32.3 million at the same point in 2007

A portion of the increase in revenues is attributable to Essex’s $26.5 million investment in new heavier lift cranes over the past 12 months to replace older lower capacity cranes.

Privately held Essex was acquired by Hyde Park Acquisition Corporation in March of this year, for a total of $210 million once the deal is completed Essex will report as a publicly held business.

Laurence S. Levy, chairman and chief executive of Hyde Park, said: “As evidenced by Essex’s continued strong operating results and backlog as of June 30, 2008, the Company has sufficient bookings in hand to support its full year 2008 rental revenue projections. Based on the pace of new contract–related activity, the addition of new equipment to the fleet, and the continued strength of Essex’s end markets, we believe that the Company is likely to exceed its previously projected 2008 Total EBITDA of $40.2 million. This is primarily attributable to as much as an eight percent increase in predicted full year Rental EBITDA.”

“During the second quarter, Essex continued to execute on its strategy of selling lower lifting capacity, older cranes and redeploying its capital into higher monthly average rental rate, higher lifting capacity equipment, which has also historically produced higher utilisation rates. In the first half of 2008, the Company sold 15 cranes to either overseas concerns or domestic fixed operators. Importantly, the relationship between the sales price of this equipment and the orderly liquidation value of the assets has exceeded the Company’s historic experience. Concurrent with these sales, the Company has taken delivery of $15.9 million of new equipment in 2008. This investment has begun to benefit revenues and profitability and we expect this to continue for the remainder of 2008 and beyond.”