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Electro Rent Reports Fiscal 2010 Second Quarter Financial Results

Posted by Dana in December 18th 2009

Electro Rent Corporation (NASDAQ:ELRC) reported financial results for its fiscal 2010 second quarter ended November 30, 2009.

Total revenues for the fiscal 2010 second quarter rose to $36.6 million from $35.4 million for the year-ago period. Rental and lease revenues totaled $23.3 million, versus $26.2 million last year. Equipment sales and other revenues increased to $13.2 million for the fiscal 2010 second quarter from $9.3 million for the fiscal 2009 second quarter.

SG&A expenses for the fiscal 2010 second quarter decreased to $10.4 million, or 28.3% of total revenues, from $12.1 million, or 34.0% of total revenues, for same period last year, as the result of proactive cost-cutting measures throughout the company.

Total operating expenses were $30.7 million for the second quarter of fiscal 2010, versus $30.6 million in the year-ago period. Interest income was $1.0 million for the fiscal 2010 second quarter, compared with $632,000 in the prior year. The increase principally reflects a realized gain of approximately $800,000 on the sale of two bond funds, offsetting a decrease in interest rates.

Operating profit for the first quarter of fiscal 2010 rose to $5.9 million, or 16.1% of total revenues, compared with $4.8 million, or 13.7% of total revenues, for last fiscal year’s second quarter.

Net income for the fiscal 2010 second quarter was $4.0 million, or $0.17 per diluted share, versus $3.5 million, or $0.14 per diluted share, for the same period last year.

Total revenues for the six months ended November 30, 2009 equaled $68.8 million, compared with $70.4 million for the six months ended November 30, 2008. Rental and lease revenues for the first six months of fiscal 2010 were $45.1 million, versus $53.4 million for the first six months of fiscal 2009. Equipment sales and other revenues totaled $23.7 million, up from $17.0 million for the first six months of fiscal 2009.

SG&A expenses were $20.7 million, or 30.0% of total revenues, for the fiscal 2010 year-to-date period, versus $24.1 million, or 34.2% of total revenues, for the same period last year. Total operating expenses for the fiscal 2010 six-month period were $59.6 million, equal to the comparable period last year.

Operating profit for the first six months of fiscal 2010 was $9.2 million, or 13.4% of total revenue, versus $10.8 million, or 15.4% of revenue, in the prior-year period.

Net income in the fiscal 2010 year-to-date period was $6.1 million, or $0.25 per diluted share, compared with $7.9 million, or $0.31 per diluted share, in the fiscal 2009 period.

Equipment purchases for the fiscal 2010 second quarter and year-to-date period were $13.6 million and $23.0 million, respectively, compared with $15.4 million and $32.7 million, respectively, for the same periods last year. The book value of Electro Rent’s equipment pool was $144.5 million at November 30, 2009, versus $158.3 million at May 31, 2009.

The company paid dividends totaling $3.6 million for the second quarter of fiscal 2010. On an annualized basis, the company’s current quarterly dividend of $0.15 per common share represents a 5.2% yield on the December 16, 2009 close price of $11.64.

Total shareholders’ equity grew to $231.0 million, or $9.66 per share, at November 30, 2009, from $228.8 million, or $9.55 per share, at May 31, 2009.

At November 30, 2009, Electro Rent had $58.8 million in cash and cash equivalents and $20.9 million (at cost) in auction rate securities for a total cash, cash equivalents and investments balance of $79.7 million, up from $72.0 million at May 31, 2009. Electro Rent’s balance sheet remains debt free.