United Rentals, Inc. (NYSE:URI) Q2 2019 Earnings Conference Call - Final Transcript

Jul 18, 2019 • 11:00 am ET


United Rentals, Inc. (NYSE:URI) Q2 2019 Earnings Conference Call - Final Transcript


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Good morning, and welcome, to the United Rentals Investor Conference Call. Please be advised that this call is being recorded. Before we begin, note that the Company's press release, comments made on today's call and responses to your questions contain forward-looking statements. The Company's business and operations are subject to a variety of risks and uncertainties, many of which are beyond its control and consequently, actual results may differ materially from those projected.

A summary of these uncertainties is included in the Safe Harbor statement contained in the Company's press release. For a more complete description of these and other possible risks, please refer to the Company's annual report on form 10-K for the year ended December 31st, 2018 as well as to subsequent filings with the SEC.

You can access these filings on the Company's website at www.unitedrentals.com. Please note that United Rentals has no obligation and makes 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 and expectations.

You should also note that the Company's press release and today's call include references to non-GAAP terms such as free cash flow, adjusted EPS, EBITDA, and adjusted EBITDA. Please refer to the back of the Company's recent investor presentations to see the reconciliation from each non-GAAP financial measure to the most comparable GAAP financial measure. Speaking today for United Rentals is Matt Flannery, President and Chief Executive Officer and Jessica Graziano, Chief Financial Officer.

I will now turn the call over to Mr. Flannery. Mr. Flannery, you may begin.

Matthew J. Flannery

Thank you, Jonathan, and good morning, everyone. Thanks for joining us. Today we're taking stock of 2019 at the halfway point and giving you our thoughts on the balance of the year. And I'll start with the quarter and then Jess will cover the results and we'll spend the rest of the call on Q&A.

We turned in a solid performance in the second quarter at both the top and the bottom lines. This included total revenue growth of 21% compared with Q2 of last year and over $1 billion of adjusted EBITDA, up more than 18%. Our pro forma margin for adjusted EBITDA was up 40 basis points and our EPS was 23% higher than a year ago. These metrics underscore the upside of the cycle and the earning power of our larger service offering.

Fleet productivity was bolstered by the strength of rate and mix, but dampened by softer time utilization. This is partly due to a temporary drag from the Blueline integration. It's our largest acquisition in nearly a decade. And while the overall integration is going well, it's taking a little longer than we expected. As a result, we haven't been absorbing the fleet in the impacted markets as quickly as we'd like, and we'll talk more about this later.

Other areas of Blueline, such as cost synergies, are coming along as expected. And most importantly, the teams are working really well together.