Herc Holdings Inc. · NYSE:HRI
Herc — Q1 2025 Earnings Presentation
31 slides from Herc's earnings presentation, Apr 22, 2025
Slide 1: Scaling for Sustainable Growth
Scaling for Sustainable Growth Q1 2025 EARNINGS CONFERENCE CALL April 22, 2025
Slide 2: Herc Rentals Team and Agenda
Herc Rentals Team and Agenda Agenda Safe Harbor Q1 2025 Overview Q1 Operations Review Q1 Financial Review 2025 Outlook Larry Silber Aaron Birnbaum Mark Humphrey Leslie Hunziker Q&A President & Chief Senior Vice President Senior Vice President Senior Vice President Executive Officer & Chief Operating
Slide 3: Safe Harbor Statements and Non-GAAP Financial Measures
Safe Harbor Statements and Non-GAAP Financial Measures Forward-Looking Statements This presentation includes forward-looking statements within the meaning of Section Further information on the risks that may affect our business is included in filings we 21E of the Securities Exchange Act, as amended
Slide 4: Q1 2025: Delivering on Growth Strategies
Q1 2025: Delivering on Growth Strategies Optimize branch network for fleet / operating efficiencies at scale Strategies to Accelerate • Executed merger agreement to acquire H&E Equipment Services; 160 locations ROIC and Increase • Opened 3 previously planned greenfield locations Shareholder Returns:
Slide 5: Market and Transaction Updates
Market and Transaction Updates • Demand Environment ◦ Local vs National • 2025 Tariff Implications ◦ Primarily domestic sourced • H&E Closing Timeline ◦ HSR ◦ S-4 Registration ◦ Tender Offer • H&E Integration Planning Herc Holdings Inc. NYSE: HRI Q1 2025 5
Slide 6: Operations Review
Operations Review Aaron Birnbaum Senior Vice President and Chief Operating Officer Herc Holdings Inc. NYSE: HRI Q1 2025 6
Slide 7: Focusing on Safety
Focusing on Safety Continuing focus on Perfect Days • Q1 25 all branches reported > 96% Perfect Days • Perfect Days are those with no: • OSHA reportable incidents • At-fault moving vehicle accidents • DOT violations Total TTM Recordable Incident Rate is 0.93 — favorable to industry standard of 1.0 P
Slide 8: Delivering Growth and Resiliency through Diversification
Delivering Growth and Resiliency through Diversification Contractors 37% Q1 Revenue by 26% Industrial Q1 Local vs. 47% National Customer1 Local 53% National 5% Revenue Mix Other 14% 18% Commercial Facilities Infrastructure & Government • Local account revenue 53% of total vs 55% in 1Q24; local growt
Slide 9: Optimizing Fleet Mix and Lifecycle Performance
Optimizing Fleet Mix and Lifecycle Performance Fleet Expenditures at OEC1 $6.9 billion at OEC1,2 $ in millions Other Specialty 2024 2025 22% 24% $344 $366 $167 $200 Fleet $74 Composition Material 19% Q1 Q2 Q3 Q4 24% Handling Aerial 1 11% Fleet Disposals at OEC $ in millions 2024 2025 Earthmoving $23
Slide 10: Continued Strength in Key End Markets
Continued Strength in Key End Markets Industrial Spending1 Mega Project Starts3 $547 $ in billions $519 $ in billions $503 $495 $471 $466 $457 $352 $228 $328 $216 $317 —$309 — — — — — — — — — — — — — — — — — $298 18 19 20 21 22 23 24 25E 26E 27E 28E 23 24 25E Non-Residential Starts2 $552 Infrastruct
Slide 11: Capitalizing on Growth Trends Across Diverse Customer and Project Base
Capitalizing on Growth Trends Across Diverse Customer and Project Base Infrastructure Commercial Contractors (37%) Industrial (26%) Other (5%) & Gov. Direct (18%) Facilities (14%) • Electrical • Agriculture • Aerospace • Airports • Banks • Sporting Events • General Contractors • Chemical Processing
Slide 12: Financial Review
Financial Review Mark Humphrey Senior Vice President and Chief Financial Officer
Slide 13: Q1 2025 Financial Results
Q1 2025 Financial Results Three Months Ended March 31, 2025 vs 2024 % 2025 2024 $ in millions, except per share data Change Equipment Rental Revenue $739 $719 2.8% Total Revenues $861 $804 7.1% Net Income (Loss) $(18) $65 (127.7)% Earnings Per Diluted Share $(0.63) $2.29 (127.5)% Adjusted Net Income
Slide 14: Q1 2025 Financial Results Excluding Cinelease Studio Entertainment
Q1 2025 Financial Results Excluding Cinelease Studio Entertainment1 Three Months Ended March 31, 2025 vs 2024 % 2025 2024 $ in millions Change Core Equipment Rental Revenue $724 $690 4.9% Core Total Revenues $844 $774 9.0% Core Net Income ($18) $58 (131.0)% Core Adjusted EBITDA $338 $329 2.7% Core A
Slide 15: Disciplined Capital Management
Disciplined Capital Management Ample liquidity2 of $1.9 billion provides financial flexibility Maturities As of March 31, 2025 $ in millions Net leverage3 of 2.5x, within target range of 2.0x to 3.0x ABL Credit ABL Credit Facility Facility $1,620 Free cash flow of $49 million for first quarter 2025
Slide 16: Affirming 2025 Outlook (Excluding Cinelease)
Affirming 2025 Outlook (Excluding Cinelease) Metric 2024 Actual 2025 Guidance Equipment Rental Revenue 10% 4% to 6% Adjusted EBITDA $1.562 billion $1.575 billion to $1.650 billion Net Rental Equipment Expenditures $760 million $400 to $600 million Gross Capex $1.048 billion $700 to $900 million Key
Slide 17: Scaling Herc's Premier Platform: H&E Transaction Overview
Scaling Herc's Premier Platform for Superior Value Creation H&E Transaction Overview • Immediately accelerates Herc's proven strategy • Substantial revenue and cost synergies with superior cash flow conversion characteristics • Capital efficiency through optimization of fleet • Increase presence in
Slide 18: Purpose, Vision, Mission and Values
Purpose, Vision, Mission and Values Purpose: We equip our customers and communities to build a brighter future Herc Holdings Inc. NYSE: HRI Q1 2025 18
Slide 19: Appendix
Appendix oe a aw .
Slide 20: Glossary of Terms Commonly Use in the Industry
Glossary of Terms Commonly Use in the Industry OEC: Original Equipment Cost which is an operating measure based on the guidelines of the American Rental Association (ARA), which is calculated as the cost of the asset at the time it was first purchased plus additional capitalized refurbishment costs
Slide 21: Cinelease Studio Entertainment Assets Held for Sale
Cinelease Studio Entertainment Assets Held for Sale Cinelease is Herc's studio management and lighting and grip business • Market preference for lighting and grip equipment to be part of studio ownership • Owning studio real estate does not align with Herc strategy • Lighting and grip equipment repr
Slide 22: Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through EBITDA, Adjusted EBITDA, and REBITDA—EBITDA represents the sum of net income, provision (benefit) for income taxes, interest expense, net, depreciation of rental equipmen
Slide 23: Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through Three Months Ended March 31, $ in millions 2025 2024 Net income (loss) $ (18) $ 65 Income tax provision 10 16 Interest expense, net 62 61 Depreciation of rental equipment
Slide 24: Reconciliation Excluding Studio Entertainment
Reconciliation of Net Income to Adj. EBITDA and Adj. EBITDA Margin, Rental Adj. EBITDA (REBITDA), REBITDA Margin and Flow-Through, Excluding Studio Entertainment Three Months Ended March 31, 2025 2024 $ in millions Herc Studio Entertainment Herc, excl Studio Herc Studio Entertainment Herc, excl Stud
Slide 25: REBITDA Margin and Flow-Through Quarterly Trend
REBITDA Margin and Flow-Through Quarterly Trend $ in millions Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025 Net income (loss) $ 65 $ 70 $ 122 $ (46) $ 211 $ (18) Income tax provision 16 23 38 3 80 10 Interest expense, net 61 63 69 67 260 62 Depreciation of rental equipment 160 165 174 180 679 172
Slide 26: REBITDA Margin and Flow-Through Annual Trend
REBITDA Margin and Flow-Through Annual Trend $ in millions 2020 2021 2022 2023 2024 Net income $ 74 $ 224 $ 330 $ 347 $ 211 Income tax provision 20 67 104 100 80 Interest expense, net 93 86 122 224 260 Depreciation of rental equipment 403 420 536 643 679 Non-rental depreciation and amortization 63 6
Slide 27: Reconciliation of Net Income and Adjusted Earnings Per Diluted Share
Reconciliation of Net Income and Adjusted Earnings Per Diluted Share Adjusted Net Income and Adjusted Earnings Per Diluted Share - Adjusted Net Income represents the sum of net income, transaction related costs, restructuring and restructuring related charges, spin-off costs, loss on extinguishment
Slide 28: Calculation of Net Leverage Ratio
Calculation of Net Leverage Ratio Net Leverage Ratio –The Company has defined its net leverage ratio as net debt, as calculated below, divided by adjusted EBITDA for the trailing twelve- month period. This measure should be considered supplemental to and not a substitute for financial information pr
Slide 29: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow Free cash flow is not a recognized term under GAAP and should not be considered in isolation or as a substitute for our reported results prepared in accordance with GAAP. Further, since all companies do not use identical calculations, our definition and presentation
Slide 30: Historical Fleet at OEC
Historical Fleet at OEC1 $ in millions FY 2020 FY 2021 FY 2022 FY 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025 Beginning Balance $ 3,822 $ 3,589 $ 4,381 $ 5,637 $ 6,328 $ 6,416 $ 6,714 $ 7,088 $ 6,328 $ 7,044 Expenditures 348 725 1,218 1,218 167 344 366 200 1,077 74 Disposals (552) (281) (32
Slide 31: For additional information, please contact:
For additional information, please contact: Leslie Hunziker SVP Investor Relations, Communications & Sustainability leslie.hunziker@hercrentals.com 239-301-1675 Herc Holdings Inc. NYSE: HRI Q1 2025 31