H&E Equipment Services, Inc. (H&E Rentals) reported its financial results for the fourth quarter and full year of 2024, along with the announcement of its acquisition agreement with Herc Holdings Inc.

In the fourth quarter of 2024, total revenues decreased slightly by 0.4% to $384.1 million, with equipment rental revenues increasing by 0.8% to $319.4 million. However, net income dropped to $32.8 million from $53.5 million in the same quarter of 2023. Adjusted EBITDA also declined by 5.6% to $174.9 million, with a margin of 45.5%.

Equipment rental revenue growth was modest, with rental revenues up 0.9% to $283.0 million. Meanwhile, sales of rental equipment saw a significant decline of 30.1% to $28.4 million, while sales of new equipment more than doubled to $20.5 million. Gross profit declined by 10.1% to $167.6 million, with overall gross margins dropping to 43.6% from 48.3% in the previous year.

Operational performance saw a slight decline, with average time utilization decreasing to 66.4% from 68.4%, and average rental rates falling 1.1% compared to the previous year. The rental fleet grew 5.5% in value to approximately $2.9 billion, with an average fleet age of 41.7 months.

SG&A expenses rose 9.7% to $117.0 million, driven by higher professional fees, expansion costs, and increased depreciation and amortization. Income from operations fell to $53.8 million from $81.2 million in the prior year, with a decline in margin to 14.0% from 21.1%.

Net income per diluted share was $0.90, down from $1.47 in the prior-year quarter. Excluding transaction expenses, adjusted net income was $36.1 million, or $0.99 per diluted share. The company paid a regular quarterly dividend of $0.275 per share.

Despite revenue stability in the rental segment, declining rental rates, lower utilization, and higher costs impacted overall profitability. The company’s pending acquisition by Herc Holdings is expected to enhance industry positioning and operational efficiencies.