RSC Equipment Rental Sees Record Q4 Results

As a result of successful execution of the company’s strategic plan, RSC Equipment Rental, a leading provider of rental equipment and services throughout North America, accelerated its operating and financial performance in the fourth quarter of 2005 and significantly increased its market share. The company posted the best quarterly and full-year financial results in its history. The results were highlighted in the interim quarterly report issued today by RSC’s parent company Atlas Copco. Additionally, Atlas Copco has announced its intention to explore a possible trade sale, IPO or spin-off of its equipment rental business.

In what is traditionally one of the most challenging quarters of the year, RSC substantially grew rental revenue, achieved record operating profits, and most notably, improved the return on operating capital to record levels.

RSC’s fourth quarter operating profit of $111 million represents an increase of nearly 60 percent over the same quarter last year and was not only the highest quarter of 2005, but also the highest quarter ever. This improvement marks the company’s 11th consecutive quarter-over-quarter increase in operating profit. The operating profit for the full year was $357.6 million, an increase of 53.3 percent from 2004. Total revenue was $424 million for the fourth quarter compared to $371 million in 2004, and $1.6 billion for the full year compared to $1.4 billion in 2004. Rental fleet utilization, an important measure of efficiency, improved to 73 percent in the fourth quarter from 69 percent in the same quarter last year, and averaged 70 percent for the full year compared to 67 percent in 2004.

“The fact that our team successfully executed our strategic plan allowed us to achieve the most successful quarterly and annual results in our company’s history,” said Tom Zorn, president and CEO of RSC Equipment Rental. “Over the course of the past year, we have implemented a strategy that is unique to our industry and the results are very clear indicators of the soundness of our strategy to position RSC as the leader in our industry. We have done this by investing resources in people, innovation, and technology to offer customers more competitive services and industry-leading customer satisfaction.”

Commenting on today’s announcement by Atlas Copco of its intention to explore a divestment of the equipment rental business, Zorn said: “We have benefited tremendously from being owned by Atlas Copco for the past several years. They provided capital, structure, discipline and management guidance at a time when we needed it. As a result, we have achieved record operating and financial performance and set a strategic vision for the company. We now have the right team of people in place and we have premier products and industry-leading services that will allow us to continue growing and taking market share.”

Increased rental volumes, ongoing capital and cost-efficiency improvements, along with continued positive development of rental rates all contributed to these strong results. EBITDA (earnings before interest, taxes, depreciation and amortization) improved to 43 percent for the fourth quarter from 35 percent in fourth quarter 2004, and to 40 percent for the full-year 2005 from 33 percent in 2004. Likewise, return on operating capital employed increased in the quarter to 26 percent from 19 percent in 2004, significantly outperforming the cost of capital for the company and thereby continuing to generate positive economic value.

The full fourth quarter report for Atlas Copco is available on the Internet at www.atlascopco.com. Lawn & Landscape is working to contact Zorn for additional information. Visit www.lawnandlandscape.com often for updates and other news.