<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1997
--------------
or
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------ ---------------
Commission file number 1-12623
---------------------------------------------------------
U.S. Rentals, Inc.
- -------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 94-3061974
- ----------------------------------------- --------------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1581 Cummins Drive, Ste. 155, Modesto, California 95358
- --------------------------------------------------- -------------------------
(Address of Principal Executive Offices) (Zip Code)
(209) 544-9000
- -------------------------------------------------------------------------------
(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 month (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirement for the past 90 days.
Yes [_] No [X] (Registrant became subject to the filing requirements
on February 26,1997)
There were 30,748,975 shares of common stock, $.01 per value, outstanding
at May 12, 1997.
- -------------------------------------------------------------------------------
<PAGE>
U.S. RENTALS, INC.
FINANCIAL INTRODUCTION
INTRODUCTION
The Registrant's initial public offering ("IPO") was declared effective on
February 20, 1997. Prior to the IPO, the equipment rental business was
operated by USR Holdings, Inc., a California corporation (the "Predecessor")
that was treated as an S-corporation under the Internal Revenue Code. The
Registrant did not have any operations prior to its IPO. Prior to the closing
of the IPO, the Predecessor transferred substantially all of its operating
assets and associated liabilities to the Registrant in exchange for 20,748,975
shares of Common Stock of the Registrant, representing all of the Registrant's
outstanding capital stock prior to the IPO. The Predecessor retained only non-
operating assets and liabilities, including approximately $25.7 million of notes
receivable from related parties and approximately $24.4 million of notes payable
to related parties. These transactions are referred to as the
"Recapitalization" in this report.
Because the Predecessor elected to be treated as an S-corporation, the
Predecessor's sole shareholder paid federal and California taxes on the
Predecessor's taxable income. Therefore, the provision for income taxes prior
to February 20, 1997, reflects only certain state income taxes the Predecessor
was required to pay. Upon the transfer of the assets and liabilities from the
Predecessor to the Registrant, which is a C-corporation, all income generated by
the Registrant became subject to federal income taxes and applicable state
income taxes, as reflected in the financial information included in this report.
Unless otherwise indicated, the "Company" means the Predecessor prior to the IPO
and the Registrant on or after the IPO.
<PAGE>
U.S. RENTALS, INC.
TABLE OF CONTENTS
--------------------------
PART I: Financial Information
- -------------------------------
<TABLE>
<CAPTION>
Financial Introduction
<S> <C> <C>
ITEM 1. Financial Statements
Balance Sheets -
March 31, 1997 and December 31, 1996............... 1
Statements of Operations -
Three months ended March 31, 1997 and 1996......... 2
Statements of Cash Flows -
Three months ended March 31, 1997 and 1996......... 3
Statement of Changes in Stockholders' Equity -
Three months ended March 31, 1997.................. 4
Notes to Financial Statements -
March 31, 1997..................................... 5
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................. 10
PART II: Other Information
- ------------------------------
ITEM 1. Legal proceedings.................................... 14
ITEM 2. Changes in Securities................................ 14
ITEM 3. Defaults Upon Senior Securities...................... 14
ITEM 4. Submission of Matters to a Vote of Security Holders.. 14
ITEM 5. Other Information.................................... 14
ITEM 6. Exhibits and Reports on Form 8-K..................... 14
Signatures............................................................. 15
</TABLE>
<PAGE>
U.S. RENTALS, INC.
BALANCE SHEETS
(In thousands, except share data)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
----------- ------------
ASSETS
<S> <C> <C>
Cash $ 195 $ 2,906
Accounts receivable, net 39,961 35,653
Notes receivable from affiliate - 25,365
Inventories 5,817 5,841
Rental equipment, net 217,534 205,982
Property and equipment, net 46,315 42,345
Prepaid expenses and other assets 3,881 6,356
-------- --------
Total assets $313,703 $324,448
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other liabilities $ 54,867 $ 57,008
Notes payable to related parties - 23,943
Notes payable, other 14,400 162,767
Deferred taxes 8,421 -
Taxes payable 503 -
-------- --------
Total liabilities 78,191 243,718
-------- --------
Stockholders' equity
Common stock, at stated value;
Authorized shares - 2,500 shares
Issued and outstanding shares - 900 - 699
Common stock, $.01 par value;
Authorized shares - 100,000,000
Issued and outstanding shares - 30,748,975 307 -
Paid-in capital 244,211 13,186
Retained earnings (9,006) 66,845
-------- --------
Total stockholders' equity 235,512 80,730
-------- --------
Total liabilities and stockholders' equity $313,703 $324,448
======== ========
</TABLE>
<PAGE>
U.S. RENTALS, INC.
STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
-------- --------
<S> <C> <C>
Revenues:
Rental revenue $ 65,330 $ 50,181
Rental equipment sales 7,201 3,910
Merchandise and new equipment sales 8,450 4,552
-------- --------
Total revenues 80,981 58,643
-------- --------
Cost of revenues:
Rental equipment expense 17,276 12,093
Rental equipment depreciation 14,313 11,957
Cost of rental equipment sales 3,385 1,446
Cost of merchandise and new equipment sales 6,494 3,088
Direct operating expense 21,183 15,797
-------- --------
Total cost of revenues 62,651 44,381
-------- --------
Gross profit 18,330 14,262
Selling, general and administrative expense 7,553 6,692
Non-rental depreciation and amortization 2,152 1,995
Termination cost of deferred compensation agreements 20,290 -
-------- --------
Operating income (11,665) 5,575
Other (expense) income, net (473) 134
Interest income from related parties, net 52 866
Interest expense, net (1,553) (2,341)
-------- --------
(Loss) income before income taxes and
extraordinary item (13,639) 4,234
Income tax expense 9,894 29
-------- --------
(Loss) income before extraordinary item (23,533) 4,205
Extraordinary item, loss on extinguishment of
debt less applicable income tax benefit of $995 1,511 -
-------- --------
Net (loss) income $(25,044) $ 4,205
======== ========
</TABLE>
<PAGE>
U.S. RENTALS, INC.
STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
-------- --------
<S> <C> <C>
Operating activities:
Net (loss) income $(25,044) $ 4,205
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation 16,465 13,953
Gain on sale of equipment (3,902) (2,447)
Principal adjustment on notes receivable (146) (134)
Provision for doubtful accounts 1,472 1,051
Deferred taxes 8,421 -
Interest income not collected (294) -
Interest expense not paid 495 -
Loss on early extinguishment of debt 2,506 -
Changes in operating assets and liabilities
Accounts receivable (5,780) 1,370
Inventories 24 (607)
Prepaid expenses and other assets (1,078) (116)
Accounts payable and other liabilities (663) (6,953)
Taxes payable 503 29
-------- --------
Net cash (used in) provided by operating activities (7,021) 10,351
-------- --------
Investing activities:
Purchases of rental equipment (29,240) (24,039)
Proceeds from sale of rental equipment 7,201 4,114
Purchases of property and equipment, net (6,046) (5,523)
Funding of notes receivable, net 221 (581)
-------- --------
Net cash used in investing activities (27,864) (26,029)
-------- --------
Financing activities:
(Payments on) proceeds from line of credit (58,267) 14,747
Payments on senior notes (92,506) -
Payments on other obligations (100) (1,270)
Proceeds from issuance of common stock, net
of issuance costs 185,950 -
Distribution of cash to stockholder (998) -
Dividends paid prior to IPO (1,905) (1,120)
-------- --------
Net cash provided by financing activities 32,174 12,357
-------- --------
Net decrease in cash (2,711) (3,321)
Cash at beginning of period 2,906 3,478
-------- --------
Cash at end of period $ 195 $ 157
======== ========
Supplemental non-cash flow information:
Distribution of net assets to stockholder $ 3,221
========
</TABLE>
<PAGE>
U.S. RENTALS, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON PAID-IN RETAINED STOCKHOLDERS'
STOCK CAPITAL EARNINGS EQUITY
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 $ 699 $ 13,186 $ 66,845 $ 80,730
Net loss - - (25,044) (25,044)
Recapitalization (699) 699 - -
Distribution of non-operating assets, net - (4,219) - (4,219)
Dividends paid prior to IPO - (1,905) - (1,905)
Contribution of earnings to paid-in capital - 50,807 (50,807) -
Recapitalization due to IPO 207 (207) - -
IPO 100 187,400 - 187,500
IPO costs - (1,550) - (1,550)
-------- -------- -------- --------
Balance at March 31, 1997 $ 307 $244,211 $ (9,006) $235,512
-------- -------- -------- --------
</TABLE>
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Results of operations for the interim periods are not necessarily indicative of
the results that may be expected for a full year. For further information,
refer to the financial statements and footnotes thereto included in the
Company's Registration Statement on Form S-1 (SEC File No. 333-17783, effective
February 20, 1997).
2. PRO FORMA EARNINGS (LOSS) PER SHARE
Pro forma net income reflects an income tax provision as if the Company had been
a C-corporation for all periods presented.
The computation of pro forma earnings per share is based on the weighted average
number of outstanding common shares, on a pro forma basis, after giving effect
to the Recapitalization and the IPO. Common stock equivalents, consisting of
certain shares subject to stock options, were not included in the calculation of
pro forma earnings per share as they did not have a dilutive effect.
<TABLE>
<CAPTION>
Pro forma income data: Three Months Ended
March 31,
---------
1997 1996
---------- ----------
<S> <C> <C>
Historical net (loss) income before income
taxes and extraordinary item $ (13,639) $ 4,234
Pro forma income tax (benefit) expense (5,456) 1,694
---------- ----------
Pro forma net (loss) income before
extraordinary item (8,183) 2,540
Extraordinary item, loss on extinguishment of
debt less applicable income tax benefit of
$995,000 1,511 -
---------- ----------
Pro forma net (loss) income $ (9,694) $ 2,540
========== ==========
Pro forma net (loss) income per share $ (.40) $ .12
========== ==========
Pro forma number of shares outstanding 24,304,530 20,749,975
========== ==========
</TABLE>
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
3. BANK DEBT AND LONG-TERM OBLIGATIONS
Bank debt and long-term obligations consist of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
------ ------
<S> <C> <C>
Notes payable to related parties:
Subordinated note payable to The Colburn School
of Performing Arts, interest payable quarterly
at prime rate plus 5%, due in 2013 and 2014
(13.5% at December 31, 1996) $ - $ 20,000
Demand notes payable to related parties, interest at
various rates tied to the Predecessor's average
bank borrowing rate. Interest rates ranged from
8.45% to 10.25% at December 31, 1996 - 3,943
-------- --------
- 23,943
-------- --------
Notes payable, other:
Senior notes payable to various parties, interest
payable semi-annually ranging from 6.82% to
7.76%, due 1999-2002 - 90,000
Revolving line of credit, interest payable monthly at
reference rate (8.25% at December 31, 1996) - 26,300
Revolving line of credit, interest payable monthly
at money market rates (ranging from 5.95% to
6.26% at March 31, 1997 and 6.13% to 6.19%
at December 31, 1996) 14,000 43,000
Notes payable to a bank, interest and principal
payable monthly at rates ranging from 5.74%
to 9.51%, due 1997 - 2,967
Notes payable related to the purchase of certain
businesses, imputed interest averaging 7%,
due through 1999 400 500
-------- --------
14,400 162,767
-------- --------
$ 14,400 $186,710
======== ========
</TABLE>
On February 26, 1997 the Company repaid the bank notes, revolving line of credit
and senior notes utilizing proceeds from its IPO. The early extinguishment of
debt generated an extraordinary loss of $1,511,000 (and a net income tax benefit
of $995,000).
On February 26, 1997, the Company entered into a $300 million unsecured line of
credit with a bank maturing no later than February 25, 2002. The Company
believes it is in compliance with all covenants in the credit agreement.
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
4. COMMON STOCKHOLDERS' EQUITY
On February 26, 1997, the Company completed an IPO of 10,000,000 shares of its
common stock. Proceeds to the Company, net of the underwriting discount and
other costs, were $185.95 million. The Company utilized these proceeds to repay
the bank notes, revolving line of credit and senior notes.
5. INCOME TAXES
Income tax expense consists of the following:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1997 1996
------ ------
<S> <C> <C>
One-time charge for cumulative deferred taxes as
of the date of the IPO as if the Company had
always been subject to taxes as a C-corporation $ 8,303 $ -
Income tax provision for the period subsequent to
the IPO 1,591 -
S-corporation income tax expense - 29
------- -------
$ 9,894 $ 29
======= =======
</TABLE>
Deferred income tax assets and liabilities are computed based on temporary
differences between the financial statement and income tax bases of assets and
liabilities using the enacted marginal income tax rate in effect for the year in
which the differences are expected to reverse. Deferred income tax expenses or
credits are based on the changes in the deferred income tax assets or
liabilities from period to period.
Deferred tax assets (liabilities) are as follows:
<TABLE>
<CAPTION>
March 31,
1997
----
<S> <C>
Self-insurance reserves $ 6,320
Compensation related accruals 1,522
Allowances for doubtful accounts 3,263
State income taxes 585
Others, net 990
--------
$ 12,680
Depreciation (21,101)
--------
$ (8,421)
=========
</TABLE>
<PAGE>
U.S. RENTALS, INC.
NOTES TO FINANCIAL STATEMENTS
(Tables in thousands, except share data)
(Unaudited)
6. SUBSEQUENT EVENTS
On April 15, 1997, the Company entered into an $18 million revolving line of
credit with a related party. The note accrues interest at a rate equal to the
rate charged by Bank of America on offshore loans to the Company with changes in
the rate on the first business day of each month. Interest is payable monthly.
As of May 12, 1997, the outstanding balance was $18 million at a rate of
5.9375%.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
RESULTS OF OPERATIONS
Revenues. Total revenues for the three months ended March 31, 1997
increased 38.1% to $81.0 million from $58.6 million for the same period in 1996.
Rental revenue increased 30.2% to $65.3 million or 80.7% of total revenues in
1997, as compared to rental revenue of $50.2 million or 85.6% of total revenues
in 1996. Of the $15.1 million increase in rental revenue, $9.8 million was due
primarily to increased equipment rental fleet at existing locations. The
remaining increase of approximately $5.3 million was primarily due to 11 new
locations which were added subsequent to March 31, 1996. Rental equipment sales
increased 84.2% to $7.2 million or 8.9% of total revenues in 1997 from $3.9
million or 6.7% of total revenues in 1996 due to increased customer demand and
increased sales efforts. Merchandise and new equipment sales increased 85.6% in
1997 to $8.5 million or 10.4% of total revenues as compared to $4.6 million or
7.8% of total revenues for the same period in 1996, primarily due to increased
rental revenue and demand for new equipment.
Gross Profit. Gross profit for the three months ended March 31, 1997
increased 28.5% to $18.3 million from $14.3 million for the same period in 1996
primarily due to increased rental revenue. Gross profit from rentals increased
29.1% to $33.7 million in 1997 from $26.1 million in the prior year as a result
of higher revenue volume. Rental gross profit as a percent of revenue decreased
to 51.6% in 1997 from 52.1% for the same period in 1996. This decrease was due
primarily to a 19.7% increase in rental equipment depreciation resulting from
the increase in rental fleet. In addition, rental equipment expense increased
31.3% due to the impact of increased rental volume. Gross profit from sales of
used rental equipment increased 54.9% to $3.8 million from $2.5 million in 1996
due to increased demand for used equipment, but decreased as a percent of such
sales due to the mix of sales toward later model equipment. Gross profit from
sales of merchandise and new equipment increased 33.6% for the three months
ended March 31, 1997 as compared to the same period in 1996 due to the impact of
increased rental volume on the sale of merchandise and an increase in new
equipment sales, but decreased as a percent of such revenue due to the increased
mix of sales of lower margin items. Gross profit was also impacted by an
increase in direct operating expenses in 1997 which increased 34.1% to $21.2
million as compared to $15.8 million for the same period in 1996. The increase
reflects staffing and facilities costs resulting from an increased number of
rental yards and higher maintenance costs necessary to support the increased
size of the rental fleet.
Selling, General and Administrative Expense. Selling, general and
administrative expense for the three months ended March 31, 1997 increased 12.9%
to $7.5 million or 9.3% of total revenues compared to $6.7 million or 11.4% of
total revenue for the same period in 1996. The increase was primarily due to
higher advertising, bad debt and liability insurance expenses, the total of
which were partially offset by lower profit sharing expense in 1997 as compared
to 1996.
Other Income (Expense). Substantially all other income and expense items
are related to investments and charitable contributions made at the direction of
the sole shareholder of the Predecessor prior to the Company's IPO and are not
expected to be incurred by the Company in the future.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
Interest Expense. Interest expense related to bank debt and senior notes
that were repaid with the proceeds of the IPO decreased 30.2% to $1.6 million
for the three months ended March 31, 1997 from $2.3 million for the same period
in 1996. The decrease was primarily the result of lower average borrowings under
the credit facility and other debt outstanding of $14.4 million for the three
months ended March 31, 1997 as compared to $90.5 million for the same period in
1996.
Income Taxes. Prior to the IPO, the Predecessor had elected to be taxed as
an S-corporation for federal and state purposes. Income tax expense was
approximately 1.5% of pre-tax income for 1996 and for the period January 1, 1997
through February 26, 1997. For the remainder of the quarter, February 27,1997
through March 31, 1997, the Company's income was taxed as a C-corporation at an
effective rate of 40.0%.
LIQUIDITY AND CAPITAL RESOURCES
The Company received net proceeds of $185.9 million from the IPO of
10,000,000 shares of its common stock on February 26, 1997. A portion of the net
proceeds from the IPO were used to repay all of the senior notes and borrowings
under the credit facility. In conjunction with the IPO, the Company entered into
a new credit facility which provides availability of up to $300.0 million with
its existing lenders. The Company believes that cash flow from operations and
availability under the new credit facility will be sufficient to support its
operations and liquidity requirements for at least the next 12 months.
The Company has primarily used cash to purchase rental equipment, invest in
acquired and start-up rental yards and, prior to the IPO, pay dividends to the
Company's principal stockholder. The Company historically has financed its cash
requirements primarily through net cash provided by operating activities and
borrowings under its credit facility.
For the three months ended March 31, 1997, the Company's operating
activities used net cash flow of $7 million as compared to providing positive
cash flow of $10.4 million for the same period in 1996. The $16.7 million
decrease in cash flows generated by operating activities before adjustments for
changes in operating assets was primarily due to the one-time payment of $20.3
million of compensation expense related to the termination of the Predecessor's
deferred compensation agreements just prior to the IPO in February, 1997, but
was partially offset by higher depreciation expense due to a larger rental
equipment fleet that supported growth in revenues.
Net cash used in investing activities was $27.8 million for the three
months ended March 31, 1997 as compared to $26.0 million for the same period in
1996. The principal causes for the variation in cash flow between the periods
were increased purchases of rental equipment and investment in property and
equipment, partially offset by increased sales of rental equipment. Purchases of
rental equipment in 1997 were $29.2 million as compared to $24.0 million for the
same period in 1996.
Net cash provided by financing activities was $32.2 million for the three
months ended March 31, 1997 as compared to $12.4 million for the same period in
1996. The principal causes for the variation between periods was the receipt of
the net proceeds of $185.9 million from the IPO in February, 1997. Most of the
net proceeds from the IPO were used to repay all of the senior notes and
borrowings under the credit facility.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
PART II. OTHER INFORMATION
---------------------------
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
On February 26, 1997 the Company's sole stockholder, pursuant to a
written consent, authorized the adoption of the Company's amended and
restated bylaws and the Company's 1997 Performance Award Plan.
Item 5. Other Information
Supplemental Pro Forma Net Income. Supplemental pro forma net income
increased 51% to $5.2 million for the three months ended March 31,
1997 from $3.4 million for the same period in 1996. Supplemental pro
forma net income includes the following adjustments to the historical
income statement: the add-back of $20.3 million non-recurring charges
related to the termination of the Predecessor's deferred compensation
agreements in the first quarter of 1997, the reduction/add-back of
interest income (expense) on related party balances, and the add-back
of interest expense related to bank debt that was repaid with the net
proceeds of the IPO. These adjustments reflect the Company as if the
Recapitalization and IPO occurred as of the beginning of the periods
presented. In addition, income taxes have been calculated as if the
Company had been taxed as a C-corporation during both periods
presented. On a pro forma C-corporation basis, the Company's effective
tax rate would have been 40.2% in 1996 as compared to 40.0% in 1997.
Earnings (loss) per share is computed using the weighted average
number of shares of common stock and common stock equivalents, on a
pro forma basis, assuming that the Recapitalization and IPO occurred
as of the beginning of the periods presented.
<PAGE>
U.S. RENTALS, INC.
MARCH 31, 1997
Item 5. -continued,
Supplemental pro forma net income data (in thousands, except per share
data) (unaudited):
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------
1997 1996
---- ----
<S> <C> <C>
Supplemental pro forma net income $ 5,152 $ 3,411
======= =======
Supplemental pro forma net income per share $ .17 $ .11
======= =======
Supplemental number of shares outstanding 30,748,975 30,748,975
========== ==========
</TABLE>
Item 6. Exhibits and reports on Form 8-K
The Company did not file any reports on Form 8-K during the quarter
ended March 31, 1997.
10.1 Demand revolving note payable to Richard D. Colburn.
27.1 Financial data schedule.
<PAGE>
U.S. RENTALS, INC.
March 31, 1997
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
U.S. RENTALS, INC.
(Registrant)
Date: May 13, 1997 By: /s/ JOHN S. MCKINNEY
------------ -----------------------------------
John S. McKinney
Vice President
Chief Financial Officer
<PAGE>
EXHIBIT 10.1
REVOLVING CREDIT NOTE
$18,000,000.00 Modesto, California
April 15, 1997
FOR VALUE RECEIVED, the undersigned, a Delaware corporation ("Maker"),
promises to pay to the order of Richard D. Colburn ("Holder"), at Beverly Hills,
California, or at such other place as may be designated in writing by Holder,
within four (4) days after written demand, the principal balance plus accrued
interest on an amount up to eighteen million dollars ($18,000,000) as
represented by advances, repayments and readvances.
Draws upon this Revolving Credit Note may be made in whole or in part as
requested by Holder from time to time. Interest thereon from the date of such
draw shall accrue on the outstanding principal balance at the same rate charged
by Bank of America to the Company under the credit agreement between the bank
and the Company dated February 26, 1997, as amended from time to time less any
committment fee actually charged by the bank for such period. Changes in the
rate hereunder shall be effective as of the first day of each calendar month,
but in no event shall interest accrue at a rate in excess of the maximum rate of
interest allowable under California law. Interest shall be payable monthly on
the fifth business day of the following month.
Principal and interest are payable in lawful money of the United States.
If action be instituted on this note, the undersigned corporation promises to
pay such sum as the court may fix as attorneys' fees.
IN WITNESS THEREOF, the undersigned has executed this Note on the above date.
U.S. RENTALS, INC.
BY /s/ John S. McKinney
-----------------------
John S. McKinney
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 195
<SECURITIES> 0
<RECEIVABLES> 39,961
<ALLOWANCES> 0
<INVENTORY> 5,817
<CURRENT-ASSETS> 0
<PP&E> 263,849
<DEPRECIATION> 0
<TOTAL-ASSETS> 313,703
<CURRENT-LIABILITIES> 69,770
<BONDS> 0
0
0
<COMMON> 703
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 313,703
<SALES> 65,330
<TOTAL-REVENUES> 80,981
<CGS> 52,772
<TOTAL-COSTS> 62,651
<OTHER-EXPENSES> 29,995
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,583
<INCOME-PRETAX> (13,639)
<INCOME-TAX> 9,894
<INCOME-CONTINUING> (23,533)
<DISCONTINUED> 0
<EXTRAORDINARY> 1,511
<CHANGES> 0
<NET-INCOME> (25,044)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
