UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

Commission File No. 1280191

 

 

NES Rentals Holdings, Inc.

(Exact name of registrant as specified in its charter)

 

 

8770 W. Bryn Mawr, 4^th Floor
Chicago, Illinois 60631
(Address of principal executive offices)

 

(773) 695-3999

(Registrant’s telephone number, including area code)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o

 

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No ý

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ý No o

 

There were 19,028,964 shares of Common Stock, par value $0.01 per share, outstanding as of May 4, 2005.

 

 

NES RENTALS HOLDINGS, INC.

FORM 10-Q INDEX

 

PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
Item 4.	Controls and Procedures
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
Item 3.	Defaults upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security Holders
Item 5.	Other Information
Item 6.	Exhibits
SIGNATURE
Index of Exhibits

 

 

 

2

 

Report of Independent Registered Public Accounting Firm

 

The Board of Directors

NES Rentals Holdings, Inc.:

 

We have reviewed the consolidated balance sheet of NES Rentals Holdings, Inc. and subsidiaries (the Company or the Successor) as of March 31, 2005 and the related consolidated statements of operations and comprehensive income (loss) and cash flows for the three-month period ended March 31, 2005 and for the two-month period ended March 31, 2004.  These consolidated financial statements are the responsibility of the Company’s management.

 

We conducted our reviews in accordance with standards of the Public Company Accounting Oversight Board (United States).  A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters.  It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole.  Accordingly, we do not express such an opinion.

 

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

 

We have previously audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of the Company as of December 31, 2004, and the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit) and cash flows for the eleven-month period then ended (not presented herein), and the consolidated statements of operations and comprehensive income (loss), stockholders’ equity (deficit) and cash flows of National Equipment Services, Inc. (the Predecessor) for the one-month period ended January 31, 2004; and in our report dated March 31, 2005, we expressed an unqualified opinion on those consolidated financial statements.

 

 

	(signed) KPMG LLP
Chicago, IL
May 12, 2005

 

3

 

Forward Looking Statements

Note: This quarterly report contains forward-looking statements as encouraged by the Private Securities Litigation Reform Act of 1995. All statements contained in this document, other than historical information, are forward-looking statements. These statements represent management’s current judgment on what the future holds. A variety of factors could cause business conditions and the Company’s actual results to differ materially from those expected by the Company or expressed in the Company’s forward-looking statements. These factors include, without limitation, changes in market price or market demand for rental equipment; loss of business from customers; general declines in rental rates in the market; pricing pressure from competitors; unanticipated expenses; changes in financial markets; the Company’s substantial leverage; and other factors discussed in the Company’s filings with the Securities and Exchange Commission.

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports are available on our internet website free of charge.  These reports are available as soon as practicable after we electronically file these reports with the Securities and Exchange Commission.  Our website address is www.nesrentals.com.

PART I

FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

NES RENTALS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share information)

		March 31, 2005			December 31, 2004
		(Unaudited)
Assets
Cash and cash equivalents		$	5,676		$	39,050
Trade accounts receivable, net of allowance for doubtful accounts of $5,187 and $5,532, respectively		111,281			129,826
Inventory, net of reserves		14,005			14,863
Prepaid expenses and other assets		26,660			22,852
Rental equipment, net of depreciation		380,555			383,934
Property and equipment, net of depreciation		25,906			26,969
Unamortized debt issuance costs		12,611			13,323
Unamortized intangible assets		8,811			9,421
Total assets		$	585,505		$	640,238
Liabilities
Trade accounts payable		$	21,284		$	29,419
Accrued expenses and other liabilities		42,450			45,750
Debt		448,113			474,640
Total liabilities		511,847			549,809
Commitments and contingencies		—			—
Stockholders’ equity:
Common stock, $0.01 par, 25,000 shares authorized; 19,029 shares issued and outstanding at March 31, 2005; 19,004 shares issued and outstanding at December 31, 2004		190			190
Additional paid-in capital		151,642			151,642
Accumulated deficit		(78,970		)	(62,248		)
Accumulated other comprehensive income		796			845
Total stockholders’ equity		73,658			90,429
Total liabilities and stockholders’ equity		$	585,505		$	640,238

See accompanying notes to consolidated financial statements and review report of KPMG LLP.

 

4

 

NES RENTALS HOLDINGS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share information)

 

		Successor						Predecessor
		For the three months ended March 31, 2005			For the two months ended March 31, 2004			For the one month ended January 31, 2004
		(Unaudited)			(Unaudited)
Revenues
Rental and service revenues		$	103,671		$	65,887		$	33,068
New equipment sales		5,462			5,029			3,318
Rental equipment sales		6,277			6,240			2,120
Other revenues		4,237			2,906			1,424
Total revenues		119,647			80,062			39,930
Cost of revenues
Cost of rental and service revenues		55,000			35,997			17,454
Rental equipment depreciation		27,894			17,842			8,138
Cost of new equipment sales		4,588			4,052			2,802
Cost of rental equipment sales		3,615			4,409			1,328
Other operating expenses		4,378			2,920			1,498
Total cost of revenues		95,475			65,220			31,220
Gross profit		24,172			14,842			8,710