Customer Overview
For over 40 years, our client has been a cornerstone in Texas’s crane rental, rigging, and trucking industry. Known for delivering reliable and specialized equipment services, the company has become a trusted partner across multiple sectors, meeting the heavy-lift demands of regional projects. This client has relied on Equify Financial since 2012 for solutions that fuel their growth and adaptability in a competitive market.
The Need
To expand their fleet, meet increased customer demand, and further secure their market position, the client sought a lease of $5,530,000. The objective: to acquire a 2024 Liebherr LTM hydraulic all-terrain crane directly from the manufacturer. This crane, with its enhanced lifting capabilities and mobility, was identified as a strategic addition, positioning the company to take on larger, higher-margin projects.
Financial Snapshot
The client’s financial picture, while strong in profitability and growth, presented some liquidity constraints, making a leasing option preferable for this asset acquisition.
- Revenue and Profitability Growth: The company achieved a 6% revenue increase over the previous fiscal year, reflecting successful growth in both their fleet size and market share. Additionally, they maintained a strong gross profit margin at 66%, showing effective management of operating costs, including fuel, repairs, and depreciation.
- Liquidity Position: Cash reserves were adequate and growing. However, with a current ratio of 0.86 and a quick ratio of 0.66, the company’s ability to meet short-term obligations could face challenges if unforeseen financial pressures arose.
- Operational Efficiencies:
- Accounts Receivable: The customer’s collection cycle is tightening, with net receivable days reduced slightly from 54 to 53 days, alongside a modest rise in total accounts receivable to $2,428,000.
- Accounts Payable: The company is paying down obligations more quickly, with accounts payable days reduced from 26 to 23 days and total accounts payable at $351,000, indicating sound cash flow management.
Leasing Strategy
To achieve their goals, the client used Equify Financial’s leasing solution to acquire the Liebherr crane without disrupting their operational cash flow. By structuring lease payments that aligned with the company’s financial framework, Equify’s lease was a convenient and efficient tool, allowing them to secure the asset while preserving liquidity for day-to-day operations and ongoing growth.
Results and Impact
With the 2024 Liebherr crane now part of their fleet, the company has positioned itself to take on higher-revenue contracts and enhance its competitive standing. Their decision to lease rather than buy outright reflects the kind of strategic planning that has sustained their growth for decades. Leveraging Equify as a financial tool, they successfully secured an asset that aligns with their long-term vision—empowering them to confidently meet evolving customer needs and tackle ambitious projects with a financially sustainable approach.
How Equify Can Support Your Vision For Long-term Success
Facing similar challenges in scaling your operations? Equify Financial’s industry expertise and customized solutions are designed to meet your unique needs. With a focus on partnership and long-term value, we’re here to help you achieve your goals.
Ready to talk? Reach out today, and let’s explore how we can support your journey to success.
