Wednesday, May 05, 1999
Renting becomes workable option
Companies using others' equipment
BY AMY HIGGINS
The Cincinnati Enquirer
Roger Stone found out Monday that workers in his company, Northern Kentucky Electric Service Inc., needed to get in the rafters at Johnson Controls to run electric wires into new injection molding equipment. The only problem was that the company's scissor lift needed for the project was at another job site.
The problem was solved with a phone call to NationsRent Inc., a construction-equipment rental company.
“Generally speaking, 99 percent of the time, they take care of what you want,” Mr. Stone said. And they do it at monthly rental prices a fraction of the equipment's full purchase price, he said.
NationsRent offers a range of commercial and industrial equipment, from concrete saws to backhoes and trucks. With most of their equipment carrying strict regulations from the Occupational Safety and Health Administration, this isn't the place for do-it-yourself home-repair handymen.
But with industrial and non-residential construction booming, NationsRent and its competitors are not lacking for customers. The rental industry is among the fastest-growing in America, with an annual growth rate of about 20 percent from 1990 to 1997. Industry revenues increased from $614 million in 1982 to $21 billion in 1998. Experts project those to almost double to more than $40 billion by 2005.
“People are finding that it's much more cost-effective to rent,” said Lloyd Glick, district manager for NationsRent in Cincinnati.
NationsRent, the country's fourth-largest construction equipment rental company, reported fourth-quarter 1998 revenue of $123.7 million and net income of $5.8 million, or 12 cents a diluted share. During that quarter alone, the company grew through 10 acquisitions and in January announced a merger with Arizona-based Rental Service Corp.
The merged companies will create the second-largest construction-equipment rental company, called RSC NationsRent. It will operate 375 branches in 38 states and employ more than 6,000.
NationsRent entered the Cincinnati market with its May 1998 purchase of the Bode-Finn Co., which specialized in renting aerial lift platforms. The company still is in the process of expanding its Cincinnati presence, expecting to have suburban satellite offices and soon to move its local offices into a 28,000-square-foot store at Spring Grove Avenue and Winton Road.
The location itself will more than double NationsRent's space in Cincinnati, and the company expects to double its fleet of rental equipment with the move. When it relocates to 4631 Spring Grove Ave., NationsRent expects to have 1,800 units — 800 larger units, such as backhoes and lifts, and 1,000 smaller tools. Mr. Glick said his company buys top brands and expects to keep its fleet less than 3 years old.
Mr. Stone said ensuring that his workers use state-of-the-art equipment is one of the reasons he prefers to rent over buying. Given that a scissor lift can cost $15,000, it isn't practical to buy a new one every few years given the amount of time it's used.
“That's a lot of capital to have to put out,” Mr. Stone said. “Nothing works more efficiently than new equipment.”
The last 30 years have seen a marked move toward efficiency and smart business practices, said Judy Short, executive director for Allied Construction Industries, a regional trade organization of 425 contractors.
“It's the difference between leasing and laying out a huge six-figure piece of the equipment you'll use on that project, but have no guarantee you'll get the next job,” Ms. Short said.
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