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Electro Rent Corp. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: April 4, 2012 04:16PM

Electro Rent Corp. (ELRC) filed Quarterly Report for the period ended 2012-02-29. Electro-rent has a market cap of $441.5 million; its shares were traded at around $16.4 with a P/E ratio of 19.6 and P/S ratio of 1.9. The dividend yield of Electro-rent stocks is 4.4%. Electro-rent had an annual average earning growth of 3.3% over the past 5 years.



Highlight of Business Operations:

Comparing the first nine months of fiscal 2012 to the first nine months of fiscal 2011, our revenues increased by 10.3% from $163.6 million to $180.4 million, our operating profit decreased 1.2% from $26.2 million to $25.9 million and our net income increased by 12.1% from $17.4 million to $19.5 million.

Our net income includes bargain purchase gains, net of deferred taxes, of $3.4 million and $0.2 million for the nine months ended February 29, 2012 and February 28, 2011, respectively, as a result of our acquisitions of EMT and Telogy, respectively. Our operating profit modestly decreased, as growth in our rental revenues and sales of new equipment were offset by an increase in depreciation expense of $3.8 million, or 10.7%, as we have invested in additional rental equipment to support our growth, and an increase in selling, general and administrative expenses of $6.0 million, or 14.4%, primarily related to the broadening and strengthening of our sales organization in support of our Agilent resale agreement, higher rental demand, and future growth opportunities.

Total revenues for the three months ended February 29, 2012 and February 28, 2011 were $60.1 million and $59.5 million, respectively. The 1.1% increase in total revenues was due to a 10.5% increase in rental and lease revenues and a 7.8% decrease in sales of equipment and other revenues.

Total revenues for the nine months ended February 29, 2012 and February 28, 2011 were $180.4 million and $163.6 million, respectively. The 10.3% increase in total revenues was due to a 10.1% increase in rental and lease revenues and a 10.5% increase in sales of equipment and other revenues.

Selling, general and administrative expenses increased 14.4% to $47.5 million in the first nine months of fiscal 2012 compared to $41.5 million in the first nine months of fiscal 2011. As a percentage of total revenues, selling, general and administrative expenses increased to 26.4% in the first nine months of fiscal 2012 from 25.4% in the first nine months of fiscal 2011. Our selling, general and administrative expenses increased primarily due to the broadening and strengthening of our sales and sales support organizations, as well as our administrative infrastructure, necessary to support our increased sales and rental demand and to better focus on future growth opportunities.

Read the The complete Report



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