H&E Equipment Services, Baton Rouge, La., last week announced a fourth-quarter loss of $12.3 million, compared to income of $8.5 million a year ago, on revenues that dropped 47.4 percent to $137.7 million. The company increased cash on hand by $36.6 million during the quarter.

“The unprecedented challenges our business and sector encountered during 2009 continued into the fourth quarter, as demand remained low and pricing remained weak. We fully expected a challenging quarter and we saw little to no improvement in the segments of the economy that drive demand for our products and services,” said John Engquist, H&E Equipment Services’ president and CEO.

“Despite the difficult environment we faced during the year, we were successful in our efforts to scale our business to current market conditions by focusing on costs, asset management, debt reduction and cash generation. As we move into 2010, there are encouraging indicators that could have a positive impact on our business,” Engquist said. “Recent economic data suggests a better year in 2010 for the overall economy and some of the major equipment manufacturers are forecasting improved business conditions during the year. However, we believe the recovery in our sector will lag that of the general economy and we expect any improvement in our end markets to occur in the latter part of the year. With this in mind, we will continue our strategy of strengthening our balance sheet through cash generation. This focus better positions our company to take advantage of future opportunities when the recovery begins.”

A non-cash goodwill impairment charge of $9 million was identified in connection with the company’s annual fourth-quarter 2009 goodwill impairment test and preparation, review and audit of the year-end financial statements. The impairment charge will not result in any cash expenditures and will not affect the company’s cash position, liquidity, availability or covenant test under its senior secured credit facility.

“H&E delivered on one of our highest priorities and closed 2009 with impressive levels of debt reduction. Since the beginning of the year, we reduced debt under our senior secured credit facility by $76 million and cash on hand increased by $34 million. The credit facility was fully repaid and we strengthened our cash position during the weakest quarter of the year,” said Leslie Magee, H&E Equipment Services’ chief financial officer. “Despite the drop in sales volume and the resulting negative effects on pricing, margins and profitability, we also significantly reduced costs. As a result of our efforts on cost control, combined with our debt reduction and cash generation, our leverage remains at low levels.”

The company reduced the investment in its rental fleet by $111 million, or 14 percent, and lowered inventories by $34 million, or 26.5 percent, throughout the course of the year.