United Rentals Provides 2007 Outlook EPS Range of $2.55 - $2.60, Before $0.50 Net Benefit from Merger Termination Fee
January 10 2008 - 4:35PM
Business Wire
United Rentals, Inc. (NYSE: URI) today provided an expected range
for its full year 2007 diluted earnings per share of $2.55 to
$2.60, an increase of at least 12% over full year 2006 diluted EPS
of $2.28. This range is before an estimated benefit of $0.50 per
diluted share from the company�s receipt of a $100 million
termination fee under its recently ended merger agreement with
affiliates of Cerberus Capital Management L.P., net of related
third-party costs and expenses. Including this one-time benefit,
the company�s expected full year 2007 GAAP EPS range is $3.05 to
$3.10. The company also expects (excluding the merger termination
benefit) full year 2007 EBITDA of $1.15 billion and free cash flow
of $130 million to $150 million, after total capital expenditures
of approximately $970 million. EBITDA and free cash flow are
non-GAAP measures. For full year 2007 compared to 2006, the company
expects: Rental revenue growth of 3.9% to a record $2.63 billion
and total revenues of $3.73 billion. Time utilization, on a larger
fleet, of 64.0%, up 2.5 percentage points, more than offsetting a
1.1% decline in rental rates. EBITDA margin improvement of 1.1
percentage points to 30.9% of revenues. SG&A expense ratio
improvement of 0.9 percentage points to 15.9% of revenues.
Transaction costs and the merger termination fee will be reflected
as a component of other income and will not be classified in
SG&A. Following the signing of the Cerberus merger agreement in
July 2007, the company ceased providing and updating its 2007
full-year guidance. In light of the agreement�s recent termination,
the company, with this release, is reinstituting such guidance.
Consistent with its regular schedule, the company expects to report
its final audited results for 2007 at the end of February. 2008
Outlook The company also announced preliminary 2008 guidance for
diluted earnings per share of $2.80 to $3.00 based on rental
revenue growth of 3.0% to $2.71 billion and total revenues of $3.53
billion. Rental revenue expectations reflect virtually no growth
capital and an anticipated improvement in time utilization. The
company also expects to generate $1.17 billion to $1.21 billion of
EBITDA, representing an EBITDA margin improvement of about 2.8
percentage points to 33.7% of revenues. Additionally, the company
expects to realize $325 million to $375 million of free cash flow
after total capital expenditures of approximately $715 million. The
company will provide more detailed 2008 guidance when it reports
its final 2007 results. CEO Comments Michael Kneeland, chief
executive officer of United Rentals, said, �We remained strongly
focused on our customers and our strategic objectives in 2007,
despite a lengthy merger process. Our expected 2007 increase in
EBITDA reflects the value of refocusing on our core business,
managing our rental fleet for better returns, and implementing a
number of cost-saving measures. Our 2008 outlook anticipates the
continued success of this strategy recognizing the limited growth
expected in our primary end markets.� Conference Call Information
The company will hold an investor update conference call with
Michael Kneeland and Martin Welch, chief financial officer, on
Friday, January 11, 2008, at 8:30 a.m. Eastern Time. The dial-in
number is 866-835-8845. The conference call is also available by
audio webcast at unitedrentals.com, where it will be archived until
the company�s next call. A replay of this conference call will also
be available for two weeks by calling 703-925-2533, passcode:
1186677. About United Rentals United Rentals, Inc. is the largest
equipment rental company in the world, with an integrated network
of over 690 rental locations in 48 states, 10 Canadian provinces
and Mexico. The company's approximately 10,900 employees serve
construction and industrial customers, utilities, municipalities,
homeowners and others. The company offers for rent over 20,000
classes of rental equipment with a total original cost of $4.2
billion. United Rentals is a member of the Standard & Poor's
MidCap 400 Index and the Russell 2000 Index� and is headquartered
in Greenwich, Conn. Additional information about the company is
available at www.unitedrentals.com. Forward Looking Statements
Certain statements in this press release are forward-looking
statements within the meaning of the �safe harbor� provisions of
the Private Securities Litigation Reform Act of 1995. These
statements can generally be identified by words such as �believes,�
�expects,� �plans,� �intends,� �projects,� �forecasts,� �may,�
�will,� �should,� �on track� or �anticipates,� or the negative
thereof or comparable terminology, or by discussions of vision,
strategy or outlook. Our businesses and operations are subject to a
variety of risks and uncertainties, many of which are beyond our
control, and, consequently, actual results may differ materially
from those projected by any forward-looking statements. Factors
that could cause actual results to differ from those projected
include, but are not limited to, the following: (1) weaker or
unfavorable economic or industry conditions can reduce demand and
prices for our products and services, (2) non-residential
construction spending, or governmental funding for infrastructure
and other construction projects, may not reach expected levels, (3)
we may not always have access to capital at desirable rates for our
businesses or growth plans, (4) any companies we acquire could have
undiscovered liabilities, may strain our management capabilities or
may be difficult to integrate, (5) rates we can charge and time
utilization we can achieve may be less than anticipated,(6) costs
we incur may be more than anticipated, including by having expected
savings not be realized in the amounts or time frames we have
planned, (7) competition in our industry for talented employees is
intense, which can affect our employee costs and retention rates,
(8) we have (and the ability to incur additional) significant
leverage, which requires us to use a substantial portion of our
cash flow for debt service and can constrain our flexibility in
responding to unanticipated or adverse business conditions, (9) we
are subject to an ongoing inquiry by the SEC, and there can be no
assurance as to its outcome or any other potential consequences
thereof for us, (10) we are subject to purported class action
lawsuits and derivative actions filed in light of the SEC inquiry
and additional purported class action lawsuits relating to the
terminated merger transaction with Cerberus affiliates, and there
can be no assurance as to their outcome or any other potential
consequences thereof for us and (11) we may incur additional
significant costs and expenses (including indemnification
obligations) in connection with the SEC inquiry, the purported
class action lawsuits and derivative actions referenced above, the
U.S. Attorney�s office inquiry, or other litigation, regulatory or
investigatory matters related to the foregoing or otherwise. For a
fuller description of these and other possible uncertainties,
please refer to our Annual Report on Form 10-K for the year ended
December 31, 2006, as well as to our subsequent filings with the
SEC. Our forward-looking statements contained herein speak only as
of the date hereof, and we make no commitment to update or publicly
release any revisions to forward-looking statements in order to
reflect new information or subsequent events, circumstances or
changes in expectations. Non-GAAP Measures Free cash flow and
EBITDA are non-GAAP financial measures as defined under the rules
of the SEC. Free cash flow represents net cash provided by
operating activities, less purchases of rental and non-rental
equipment plus proceeds from sales of rental and non-rental
equipment and excess tax benefits from share-based payment
arrangements. EBITDA represents the sum of income from continuing
operations before provision for income taxes, interest expense,
net, interest expense-subordinated convertible debentures,
depreciation-rental equipment and non-rental depreciation and
amortization. The company believes that free cash flow provides
useful additional information concerning cash flow available to
meet future debt service obligations and working capital
requirements and EBITDA provides an enhanced perspective of our
operating performance. However, neither of these measures should be
considered an alternative to net income or cash flows form
operating activities under GAAP as indicators of operating
performance or liquidity. Information reconciling forward-looking
free cash flow and EBITDA expectations to a GAAP financial measure
is unavailable to the company without unreasonable effort.
United Rentals (NYSE:URI)
Historical Stock Chart
From Jun 2024 to Jul 2024
United Rentals (NYSE:URI)
Historical Stock Chart
From Jul 2023 to Jul 2024