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Electro Rent Corp. Reports Operating Results (10-Q)

October 09, 2012 | About:
10qk

10qk

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Electro Rent Corp. (ELRC) filed Quarterly Report for the period ended 2012-08-31.

Electro Rent Corporation has a market cap of $420.4 million; its shares were traded at around $16.75 with a P/E ratio of 18.6 and P/S ratio of 1.7. The dividend yield of Electro Rent Corporation stocks is 4.6%. Electro Rent Corporation had an annual average earning growth of 3.9% over the past 10 years.

Highlight of Business Operations:

Comparing the first three months of fiscal 2013 to the first three months of fiscal 2012, our revenues decreased by 0.3% from $58.7 million to $58.5 million, our operating profit decreased 4.4% from $8.6 million to $8.2 million and our net income decreased by 40.2% from $8.5 million to $5.1 million. Our net income for the three months ended August 31, 2011 includes a bargain purchase gain, net of deferred taxes, of $3.2 million, as a result of our acquisition of EMT.

Our rental and lease revenues increased 7.5% from $31.3 million for the first three months of fiscal 2012 to $33.7 million for the first three months of fiscal 2013. Our rental and lease revenues have grown as a result of the EMT acquisition in August 2011, increased rental demand in our North American, European and Asian operations, and the integration of our new resale organization and existing T&M sales force.

For the three months ended August 31, 2012, our operating profit modestly declined compared to the three months ended August 31, 2011, as growth in our rental revenues was offset by a decline in sales of new equipment and an increase in depreciation expense of $1.5 million, or 12.2%, as we have invested in additional rental equipment to support our rental and lease growth. In addition, our selling, general and administrative expenses increased by $0.7 million, or 4.6%, for the three months ended August 31, 2012 compared to the three months ended August 31, 2011, primarily related to the broadening and strengthening of our sales organization in support of our new and used equipment sales, higher rental demand, and future growth opportunities.

Total revenues for the three months ended August 31, 2012 and 2011 were $58.5 million and $58.7 million, respectively. The 0.3% decrease in total revenues was due to a 7.5% increase in rental and lease revenues offset by a 9.2% decrease in sales of equipment and other revenues.

Selling, general and administrative expenses increased 4.6% to $16.6 million in the first quarter of fiscal 2013 compared to $15.9 million in the first quarter of fiscal 2012. As a percentage of total revenues, selling, general and administrative expenses increased to 28.4% in the first quarter of fiscal 2013 from 27.1% in the first quarter of fiscal 2012. 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 sales and rental demand and to better focus on future growth opportunities.

Read the The complete Report

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10qk
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