Ahern sees revenue rise but loss widen in second quarter

Despite continuing losses and a heavy debt burden, top managers at Ahern Rentals expressed hope that they have seen the worst of the downturn.

During the second quarter, the construction equipment rental company reported a 1 percent gain in revenue from one year ago to $72.2 million as leasing income dropped but sales of used equipment spiked upward. Its net loss widened to $27.2 million from $18.1 million last year due not only to lower operating income but higher interest payments on loans that were restructured early this year.
Since January, however, the amount of time each piece of equipment spends in the field has lengthened and rental rates have improved, said President and CEO Don Ahern.

“As we sit here today, I am pleased to say that things feel very different than they did four or five months ago,” Ahern told analysts on a conference call. “As a management team, I feel we have weathered the trough of this downturn and are beginning to see good momentum.”

In particular, he said that projects funded by federal stimulus money had broken ground while privately financed work had picked up in many areas.

One tangible sign of improvement was the increased sale of used equipment. Although analysts had previously raised this as a way to pay down debt and increase liquidity, the company had resisted taking that route last year as prices slumped during the recession. In recent weeks, however, Ahern said the supply had tightened and auction prices have gone up.

Analysts also focused on another statistic — how much the company could borrow against its revolving credit line — as an indicator of how much financial flexibility it had. The amount had sunk from $31.2 million at the end of the first quarter to $23 million in the second, but Chief Financial Officer Howard Brown said it has since rebounded to $34 million.

Still, the company last month retained the brokerage firm Oppenheimer & Co. to study various alternatives for the company, including how to handle the revolver when it comes due in one year. The company has borrowed $278.2 million against it.

Brown declined to detail the range of options Oppenheimer would pore over.

Although Ahern owns 97 percent of the company, some of the company’s debt is publicly traded so it must follow Securities and Exchange Commission reporting rules.

As the construction industry tipped into a severe recession, Ahern has tried to remake itself by quickly broadening its geographic scope. The company has boosted its number of branches by two-thirds to 71 since 2008, entering states such as Pennsylvania, North Carolina and Maryland for the first time.

The share of revenues the company draws from its historic base in Las Vegas has dropped from 35 percent in 2006, its peak financial year, to 21 percent now. In addition, Ahern has found places to redeploy all the equipment that was sitting in storage yards once the CityCenter project finished.

Trent Porter, an analyst with Guggenheim Securities in New York, said analysts had been “skeptical” that plunging into numerous new markets could reverse the company’s fortunes.

Ahern said the company had done it without engaging in heavy discounting to gain market share.

Executive Vice President Evan Ahern, the architect of the diversification strategy, said that the average new location had cost $600,000. From all the new locations, rental income was running close to $6 million a month from equipment “that otherwise would have sat idle or been sold into a depressed market.”

Still, he said the new locations were handling less than half of their potential business.

At another point, analysts questioned Don Ahern about whether he would put his own money into the company if necessary. He contended that he would do “whatever I have available and I can do” to keep the company going, but declined to state specifics.

“I would cough up a kidney and put it in if I had to,” he said.

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

ad-high_impact_4
Business
Primm’s outlet mall has fallen on hard times
The mall, attached to Primm Valley Resort, opened in 1998. Back then, it was a “textbook, perfect outlet-center location." But now, Primm’s outlet mall has fallen on hard times. Las Vegas Boulevard has endless shopping spots. And there are other outlet malls that don’t require a hefty drive to the state line. Its mortgage-holder foreclosed on the mall in late September.
Las Vegas residents discuss avoiding holiday scams
Las Vegas residents discuss their donation habits and how they avoid giving money to scam charities during the holiday season. (Bailey Schulz/Las Vegas Review-Journal)
Tesla’s Nevada Gigafactory ahead of economic impact expectations
The Tesla Gigafactory’s economic impact on Nevada has exceeded projections, bringing in more than 7,000 jobs. In 2014, Nevada agreed to give the automotive and energy company $1.3 billion in tax abatements. In return, Tesla promised to meet certain requirements in areas like employment and capital investment. As of June, Tesla has brought in a total of $6.05 billion in capital investment, surpassing the $4.95 billion projection. The original contract gave the company until 2024 to make $3.5 billion in capital investments in Nevada. Derek Armstrong, deputy director of the Governor’s Office of Economic Development.
Land sales near the Las Vegas Raiders stadium
Land around the Las Vegas stadium site has been selling for high prices. A few months before the stadium’s groundbreaking, Global Trust Group acquired a 2.5-acre parcel just north of the stadium site. The property sold for $7.25 million, or $2.9 million an acre. Osprey Real Estate Capital and Huntington Hotel Group acquired a 2-acre industrial site just west of the stadium site in late November. The property sold for $6.5 million, or $3.15 million per acre. That's roughly 12 times the average price of land in the valley this year as tracked by Colliers International.
T-Mobile Tech Experience Truck parks in Toshiba Plaza at T-Mobile Arena
The Tech Experience Truck is a state-of-the-art showroom on wheels, with demonstrations that put connected drones, smart cities, augmented/virtual reality and smart tracking. The exhibit shows new wireless technology – including 5G and the Internet of Things (IoT). (K.M. Cannon/Las Vegas Review-Journal)
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents
Steve Siegel, CEO of the Siegel Group, speaks about helping families and other needy residents to keep them from teetering off into homelessness. Bizuayehu Tesfaye/Las Vrgas Review-Journal @bizutesfaye
Crowds camp out for Chick-fil-A opening
Dozens of customers camped out 24 hours ahead of the 6 a.m. Thursday opening of the new Chick-fil-A on Rainbow Blvd.
Cheapest listings for sale in Las Vegas
Listed for $39,990, 585 S. Royal Crest Circle, Unit #9 is one of the cheapest homes currently listed for sale in Las Vegas. (Caroline Brehman/Las Vegas Review-Journal)
MGM's sports betting deals
MGM Resorts International signed a sports betting sponsorship agreement with the NBA in July It was the first professional sports league to have official ties with a legal sports betting house. The deal came just two months after the U.S. Supreme Court overturned a law prohibiting sports betting in most states. In October, MGM became the first gaming company to sign a sports betting partnership with the NHL. In November, MGM became the first gaming company to sign a sports betting partnership with the MLB. Financial terms of Tuesday’s deal and earlier partnerships have not been announced.
Terry Miller discusses Convention Center
Project Manager Terry Miller explains the phases of Convention Center construction.
Zappos treats their team members on Cyber Monday
Zappos rolls out a variety of food, drinks and special activities for all team members at their downtown Las Vegas headquarters for Cyber Monday. (K.M. Cannon/Las Vegas Review-Journal)
Team Hybrid at the 2019-Model Motor Trend International Auto Show
Among the companies showing off the 2019 model cars, Team Hybrid shows off its modified cars. Las Vegas resident David David talks about the team, which is in its ninth year exhibiting at the show, and his show car.
Black Friday Shoppers at downtown Summerlin and at the Arsenal
Black Friday shoppers at downtown Summerlin and at the Arsenal. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfYe
Black Friday shopping in Las Vegas
Black Friday sale shopers express their shopping experience. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Las Vegas Livestock recycling Strip food waste
Las Vegas Livestock collects and recycles food from many Las Vegas Strip companies. (Nicole Raz/Las Vegas Review-Journal)
Black Friday at Fry's
Shoppers line up for deals early on Black Friday at Fry's Electronics on Las Vegas Boulevard South. (Mat Luschek/Las Vegas Review-Journal)
Black Friday shoppers at Best Buy at 5 am
Black Friday shoppers at Best Buy at 5 am on Nov. 23. (Mat Luschek/Las Vegas Review-Journal
Black Friday - 1am Closing Time
Quiet night.
Black Friday - 12:30am - Best Buy Arroyo Crossing
Sam's Town Holiday Lighting Ceremony
On Wednesday, Nov. 21, 2018, Mystic Falls Park opened with its annual tree lighting ceremony, hosted by Boyd Gaming Executive Chairman Bill Boyd. The attraction features a Winter Wonderland theme and holiday-inspired laser light show, available daily Nov. 23 to Jan. 1. (Mat Luschek/Las Vegas Review-Journal)
What Is A Smart City?
George Karayannis, vice president of CityNow, Panasonic’s smart-city arm, explains. (Nicole Raz/Las Vegas Review-Journal)
Walmart uses virtual reality to train employees
Walmart Academy Facilitator demonstrates the VR training program being used by Walmart stores across the country.
With holidays around the corner, department stores hiring extra staff
J.C. Penny hired 72 seasonal workers this year at the Galleria at Sunset mall in Henderson in order to handle the heavy traffic of the holiday shopping season. (Rachel Aston/Las Vegas Review-Journal)
Startup Weekend fosters new businesses
With the help of entrepreneurial peers and an expert panel of mentors, Techstars Startup Weekend fosters the ideas of attendees into marketable business plans. (Rachel Aston/Las Vegas Review-Journal)
Mecum Car Auction in Las Vegas
The Mecum Auctions is held at the Las Vegas Convention Center. Bizuayehu Tesfaye/ Las Vegas Review-Journal @bizutesfaye
Construction underway for new Google Data Center
Henderson is slated to be home to a new Google data center in December 2020. The Governor’s Office of Economic Development approved $25.2 million in tax abatements for Design LLC, a wholly-owned subsidiary of Google. The company plans to build the data center on 64 acres of land on Warm Springs Road west of Boulder Highway.
Anthony Rufo talks about his new product, an in-home digital companion and monitor.
Anthony Rufo talks about his new product, HAPPIE Home technology, an in-home digital companion and monitor designed for unpaid family caregivers that gives personalized alerts, messages and reminders. Bizuayehu Tesfaye/Las Vegas Review-Journal @bizutesfaye
Holiday parades help bring shoppers to Downtown Summerlin
Sports Town USA floor manager Angela Gardonio talks about the work that goes into the Downtown Summerlin holiday parades and how they benefit her and other businesses there.
Final vote on CG Technology
Final commission vote on the $2 million settlement for CG Technology.
Happie Home Startup Establishing Headquarters In Las Vegas
Digital companion startup company Happie Home is establishing its headquarters in Las Vegas after receiving tax abatements from the Governor's Office of Economic Development on Nov. 15. (Bailey Schulz/Las Vegas Review-Journal)
TOP NEWS
News Headlines
Add Event
Home Front Page Footer Listing
Circular
You May Like

You May Like