RSC Equipment Rental Achieves Record Results in Third Quarter 2005; Operating Profit and Return on Capital Highlight Continuing Strong Performance.
The report included the following third quarter achievements for RSC Equipment Rental:
--Organic rental revenue growth of 13 percent in USD;
--Operating profit margin of 25.6 percent;
--EBITDA margin of 43 percent;
--Return on operating capital employed of 24 percent; and
--Rental fleet utilization of 72 percent.
"In the third quarter, our team again successfully delivered profitable revenue growth, stayed focused on efforts to improve capital and operating efficiency, and continued to launch innovative customer service improvements," said Tom Zorn, president and CEO of RSC Equipment Rental. "As these results demonstrate, our unique strategy is now gaining financial momentum which has helped RSC establish industry leadership. Importantly, long-term industry leadership and sustained profitable growth are key components of our strategy and are consistent with the Atlas Copco mission. Accordingly, we are diligently investing resources in people, innovation, and technology to offer customers more competitive services and industry-leading customer satisfaction."
Total revenues for RSC were $404 million in the third quarter of 2005, compared to $377 million in the third quarter of 2004. Most of that growth came from rate and volume improvements in equipment rentals. Sales of used equipment increased by 13 percent and rental fleet utilization in the quarter improved to 72 percent from 70 percent in the same quarter last year.
Operating profit rose to $104 million in the third quarter of 2005, the company's highest ever, and an increase of 32 percent over the same quarter of the previous year. This improvement marks RSC's tenth consecutive quarter-over-quarter increase in operating profit. The continued positive development of rental rates, increased rental volumes, and ongoing capital and cost-efficiency improvements all contributed to these strong results. Total operating costs for the third quarter were only slightly higher than the previous year, in spite of the volume growth and a $2.5 million reserve taken for costs related to hurricanes Katrina and Rita. As a result, EBITDA (earnings before interest, taxes, depreciation and amortization) improved to 43 percent from 37 percent in 2004.
Likewise, return on operating capital employed increased in the quarter to 24 percent from 16 percent in 2004, significantly outperforming the cost of capital for the company and thereby continuing to generate positive economic value, which is one of RSC's most important strategic objectives.
The full third quarter report for Atlas Copco is available on the Internet at www.atlascopco.com.
Rental Service Corporation, a company within the Atlas Copco Group, is the leading provider of equipment rental services for the construction, industrial/petrochemical, manufacturing and governmental sectors in the United States, Canada and Mexico. The company operates two well-respected brands: RSC Equipment Rental and Prime Energy. RSC Equipment Rental serves the construction and industrial markets, while Prime Energy provides oil-free air solutions to a broad range of industries. For more information, visit www.rscrental.com.
Atlas Copco is an international industrial Group with its head office in Stockholm, Sweden. In 2004, the Group had revenues of approximately BSEK 49, with 98% of revenues outside Sweden. The Group has more than 25,000 employees. The Group produces and markets compressed air equipment and generators, construction and mining equipment, industrial tools, and assembly systems and offers related service and equipment rental. The Atlas Copco Group includes famous brands such as Atlas Copco, RSC Equipment Rental, and CP. More information can be found on www.atlascopco.com.
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|Date:||Oct 21, 2005|
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