Ahern Rentals anticipates an improving economy

As it returns to normal commerce, Ahern Rentals Inc. expects an improving economy and its restructuring strategy to yield a run of several strong years.

Projections built into its Chapter 11 bankruptcy reorganization plan, approved by a judge on Wednesday, show revenues rising 31.6 percent over the next four years and profits jumping 136 percent. This would not only be enough to cover daily operations but the new loans Ahern took out to repay everyone in full.

While the company has experienced growth spurts in the past, propelled by contractors renting or buying its heavy construction equipment, one component will change markedly — the reliance on hometown Las Vegas. As recently as 2006, the company drew 35 percent of its revenues from the valley, according to company documents, but that had shrunk to 14 percent last year with no signs of rebounding significantly in the future.

But as major clients such as CityCenter were complete and with little new work to replace them, Ahern nearly doubled its branch network to 75 and established itself in 22 states as far away as New Jersey. This not only discovered paying customers for equipment that was gathering dust in Las Vegas, but diversified the sales base away from the long-standing reliance on the Southwest, including Southern California and Arizona.

At the same time, the company laid off 125 people, slimmed its inventory by 2,400 pieces to the current 36,900 and hung on to them longer before selling them used.

Revenues had dropped to $284.3 million in 2009, the last year Ahern publicly reported complete financial results, and a net loss of $70.9 million. The losses continued into the next year, drying up the cash flow needed to repay the loans used to buy the equipment and sending the company into bankruptcy in December 2011.

This year, Ahern expects revenues of $393.7 million and rising steadily to $527 million in 2017. During the same span, net income is projected to jump from $26.1 million to $61.7 million.

Besides internal efforts, Ahern benefited from a tailwind in the form of rebounding construction in other parts of the country. According to the trade magazine Rental Equipment Register, rental revenue grow 15.7 percent last year to $14 billion on top of the 17.6 percent gain in 2011.

But in a survey of the top 100 rental companies, in which Ahern ranked sixth, profit margins remained under pressure as companies faced resistance in raising rates even as the prices they paid for new equipment rose.

To emerge from bankruptcy, with the transactions that will formally release Ahern to come at an unspecified date, the company signed two new credit agreements for as much as $740 million. CEO and majority owner Don Ahern added $5 million from his personal savings as one of the conditions to the new loans. Neither Ahern nor chief financial officer Howard Brown returned calls seeking comment for this story.

Many of the pieces fell into place just in the last month, as the company faced an in-court takeover battle from one group of lenders. As it stands, those lenders will not only receive all of the $268 million they were owed but could get a $25 million bonus if they company is sold in the next two years.

Don Ahern will keep his 97 percent stake with his brother, John Paul Ahern Jr., retaining the other 3 percent.

“It has been a long road,” said attorney William Noall on Wednesday, the company’s bankruptcy counsel.

Contact reporter Tim O’Reiley at
toreiley@reviewjournal.com or 702-387-5290.

ad-high_impact_4
Business
Bellagio, MGM Resorts International’s luxury hotel turns 20
The more than 3,000-room Bellagio hotel is situated on the site of the former Dunes Hotel. The Dunes was imploded in 1993, and construction of the Bellagio started in 1996. It cost $1.6 billion to build, making it the most expensive hotel in the world at the time. The Bellagio was former Wynn Resorts Ltd. Chairman and CEO Steve Wynn’s second major casino on the Strip after The Mirage. MGM Resorts International acquired the property from Steve Wynn in 2000. (Tara Mack/Las Vegas Review-Journal)
Facial recognition software at G2E – Todd Prince
Shing Tao, CEO of Las Vegas-based Remark Holdings, talks about his facial recognition product. (Todd Prince/Las Vegas Review-Journal)
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant
Former NBA player, Shaquille O'Neal, speaks about his new Las Vegas chicken restaurant. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Bobby Baldwin to leave MGM
MGM Resorts International executive and professional poker player Bobby Baldwin is set to leave MGM.
Caesars has new armed emergency response teams
Caesars Entertainment Corp. has created armed emergency response teams. They are composed of former military and law enforcement officials. "These teams provide valuable additional security capabilities,” Caesars spokeswoman Jennifer Forkish said. Caesars is hiring Security Saturation Team supervisors, managers and officers, according to LinkedIn. The company did not say how many people it plans to hire for the units. (Las Vegas Review-Journal)
Las Vegas, airlines prepare for CES
CES in January is expected to attract more than 180,000 attendees. (Las Vegas Review-Journal)
AGS partners with Vegas Golden Knights
AGS is the nation’s second-largest manufacturer of Class II slot machines used primarily in tribal jurisdictions. It announced a marketing partnership with the Vegas Golden Knights NHL team. (Las Vegas Review-Journal)
Lehman Brothers bet big on Las Vegas
Lehman Brothers collapsed 10 years ago, helping send the country into the Great Recession.
Fremont9 opens downtown
Fremont9 apartment complex has opened in downtown Las Vegas. (Marcus Villagran/Las Vegas Review-Journal) @marcusvillagran
Ross & Snow launches in Las Vegas
Luxury shoe brand Ross & Snow has opened in Las Vegas, featuring "functional luxury" with premium shearling footwear. (Bailey Schulz/Las Vegas Review-Journal)
Remote Identification and Drones
DJI vice president of policy and public affairs discusses using remote identification on drones. (Bailey Schulz/Las Vegas Review-Journal)
Drones and public safety in Nevada
Two representatives in the drone industry discuss UAV's impact on public safety. (Bailey Schulz/Las Vegas Review-Journal)
Frontier Airlines to launch flights from Las Vegas to Mexico
Frontier, a Denver-based ultra-low-cost carrier, will become the first airline in more than a decade to offer international service to Canada and Mexico from Las Vegas when flights to Cancun and Los Cabos begin Dec. 15. (Rick Velotta/Las Vegas Review-Journal)
MGM Resorts International CEO Jim Murren addresses Oct. 1 lawsuits
MGM Resorts International Chairman and CEO Jim Murren addresses criticism his company has received for filing a lawsuit against the survivors of the Oct. 1 shooting. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International opens the doors on MGM Springfield
Massachusetts’ first hotel-casino opens in downtown Springfield. The $960 million MGM Springfield has 252 rooms and 125,000-square-feet of casino. (K.M. Cannon/Las Vegas Review-Journal)
MGM Resorts International prepares to open MGM Springfield
Las Vegas-based MGM Resorts International gave news media and invited guests a preview of the $960 million MGM Springfield casino in Massachusetts. The commonwealth's first resort casino will open Friday, Aug. 24. (K.M. Cannon/Las Vegas Review-Journal)
A Walk Through Circus Circus
It only takes a short walk through Circus Circus to realize it attracts a demographic like no other casino on the Strip: families with young children. (Todd Prince/Las Vegas Review-Journal)
Morphy Auctions, a vintage slot machines seller, wants gaming license
Vice president Don Grimmer talks about Morphy Auctions at the company's warehouse located at 4520 Arville Street in Las Vegas on Thursday, Aug. 16, 2018. (Rick Velotta/Las Vegas Review-Journal)
Nevada's venture capital money doesn't stay in state
Zach Miles, associate vice president for economic development for UNLV, said there’s venture money in Southern Nevada, “but trying to find the right groups to tap into for that money is different.” According to a 2017 report from the Kauffman Foundation, Las Vegas ranked number 34 out of 40 metropolitan areas for growth entrepreneurship, a metric of how much startups grow. With a lack of growing startups in Las Vegas, investment money is being sent outside of state borders. The southwest region of the U.S. received $386 million in funding in the second quarter, with about $25.2 million in Nevada. The San Francisco area alone received about $5.6 billion. (source: CB Insights)
Neon wraps can light up the night for advertising
Vinyl wrap company 5150 Wraps talks about neon wraps, a new technology that the company believes can boost advertising at night. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Nevada on the forefront of drone safety
Dr. Chris Walach, senior director of Nevada Institute for Autonomous Systems, talks to a reporter at NIAS's new Nevada Drone Center for Excellence of Public Safety, located inside the Switch Innevation Center in Las Vegas. K.M. Cannon Las Vegas Review-Journal @KMCannonPhoto
Motel 8 on south Strip will become site of hotel-casino
Israeli hoteliers Asher Gabay and Benny Zerah bought Motel 8 on the south Strip for $7.4 million, records show. They plan to bulldoze the property and build a hotel-casino. Motel 8 was built in the 1960s and used to be one of several roadside inns on what's now the south Strip. But it looks out of place today, dwarfed by the towering Mandalay Bay right across the street.
Project billed as one of the world's largest marijuana dispensaries plans to open Nov. 1
Planet 13 co-CEO Larry Scheffler talks about what to expect from the new marijuana dispensary, Thursday, July 19, 2018. (Marcus Villagran/Las Vegas Review-Journal) @brokejournalist
Oasis Biotech opens in Las Vegas
Brock Leach, chief operating officer of Oasis Biotech, discusses the new plant factory at its grand opening on July 18. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like