Herc Holdings continues to see growth as a stand-alone company.

The Bonita Springs-based equipment rental company had a strong fourth quarter and ended 2018 with a double-digit increase in revenue.

The public company has seen big changes since separating from Estero-based rental car giant Hertz Global Holdings in 2016 and launching a new strategic plan for growth.

Improved results have been driven by a higher volume of business, improved pricing and the diversification of its fleet. 

More: Herc Holdings of Bonita Springs reports strong third-quarter results

In the fourth quarter, total revenues grew 10.6 percent over the year to $543.7 million. For all of 2018, they increased 12.7 percent, rising to more than $1.97 billion.

The company reported earnings of $33.3 million, or $1.16 a share, for the quarter. For the year, they totaled $69.1 million. 

Profits declined in the quarter and for the year, primarily due to a $207.1 million tax benefit recorded in 2017 as a result of the Tax Cuts and Jobs Act. The company saw a much smaller benefit from tax reform in 2018.

Last year’s results came in at the high end of the company’s expectations, said Larry Silber, Herc’s president and CEO. 

In a conference call Thursday, Silber said, “The strong 2018 results are a springboard for the continued organic growth that we expect in 2019.”  

Here are a few of the fourth-quarter year-over-year highlights:

• Equipment rental revenue increased 8 percent to $447.7 million
• Pricing rose 2.9 percent
• Dollar utilization grew nearly 40 percent

Dollar utilization is determined by dividing the annual rental revenue by the cost of the equipment rented. It’s a key performance metric for Herc.

2018: Herc Holdings in Bonita Springs says CFO to retire

Adjusting for one-time costs, the company’s earnings rose 11.6 percent to $198.4 million in the fourth quarter, primarily due to higher equipment rental revenue.

The company reported greater operating expenses and selling, general and administrative expenses for the quarter, tied to increased personnel costs and compensation incentives related to growth.

In 2018, Herc’s equipment rental revenue rose 10.6 percent, or $159.3 million, over the year. The company attributed the increase to strong growth in rental revenue from local accounts and from its ProSolutions and ProContractor business, which offers rental solutions and equipment geared toward contractors and construction companies.

Company focuses on selling off older equipment and adding news

Herc benefited from a strong used equipment market. The company continues to focus on improving its mix of equipment and to reduce the age of its fleet by selling off older equipment and adding newer options.

With strong demand for its equipment, Herc saw pricing increase 2.9 percent in 2018, compared to 2017.

For the year, dollar utilization grew more than 37 percent.

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Operating expenses rose 9.6 percent in 2018 over the year, while selling, general and administration expenses and interest expense declined as a result of its focus on improved operating effectiveness and disciplined capital management. 

Adjusted earnings for the year increased 17 percent to $684.8 million, driven primarily by stronger equipment rental revenue and the higher volume of rental equipment sales. 

In 2018, the age of the company’s fleet declined by about 46 months.

Looking ahead, Silber said he expects to continue to see robust market demand and improved operating efficiencies that will drive growth this year.

While the company’s journey is still in the early stages, it’s well-positioned for growth in 2019, said Mark Irion, Herc’s senior vice president and chief financial officer.

The company expects to report adjusted earnings of $730 million to $760 million this year, an increase of 7 to 11 percent over 2018.

2017: Herc finds its own way as a stand-alone company

While the main themes of the company’s strategic plan remain the same, a fifth pillar was added early last year focused on developing Herc’s people and culture.

As part of that new initiative, Herc is working to attract and retain talent, align performance to a shared purpose, create a supportive workplace culture and expand on continuous learning.

“We’ve always believed that our people support the achievements of our customers and communities every day and as such our people are the major differentiator of Herc Rentals in a highly competitive industry,” Silber said.

Shares closed at $44 Thursday, up $3.90, or more than 9.7 percent.