HRIHIGH SIGNALRISK10-K

HRI's net income collapsed 99.5% to just $1M while total debt nearly doubled to $8B, indicating severe financial distress despite business expansion.

The dramatic earnings collapse combined with massive debt increases suggests HRI either made a major acquisition that isn't generating expected returns or is experiencing operational difficulties that are being masked by debt-financed growth. The 41% jump in interest expense is consuming nearly all profits, creating a dangerous leverage situation that threatens the company's financial stability.

Comparing 2026-02-17 vs 2025-02-13View on EDGAR →
FINANCIAL ANALYSIS

HRI's financials show a company in severe distress despite apparent growth, with total assets expanding 75% to $13.8B and receivables up 31%, but net income plummeting 99.5% to just $1M as debt nearly doubled to $8B. Interest expenses surged 41% to $122M, consuming virtually all profits, while cash declined 37% and current liabilities increased 30%. This profile suggests either a poorly performing major acquisition or fundamental operational problems being masked by unsustainable debt-financed expansion.

FINANCIAL STATEMENT CHANGES
Net Income
P&L
-99.5%
$211.0M→$1.0M

Net income declined 99.5% — review whether driven by operations, interest costs, or non-recurring items.

Total Debt
Balance Sheet
+97.1%
$4.1B→$8.0B

Debt increased 97.1% — substantial leverage increase; assess whether deployed for growth or covering losses.

Total Liabilities
Balance Sheet
+82.5%
$6.5B→$11.8B

Liabilities grew 82.5% — significant increase in debt or obligations, assess impact on financial flexibility.

Total Assets
Balance Sheet
+74.9%
$7.9B→$13.8B

Asset base grew 74.9% — expansion through organic growth, acquisitions, or capital deployment.

Interest Expense
P&L
+41.4%
$86.3M→$122.0M

Interest expense surged 41.4% — significant debt increase or rising rates materially impacting earnings.

Stockholders Equity
Balance Sheet
+39.5%
$1.4B→$1.9B

Equity base grew 39.5% — retained earnings accumulation or equity issuance strengthening the balance sheet.

Cash & Equivalents
Balance Sheet
-37.3%
$83.0M→$52.0M

Cash declined 37.3% — significant cash burn or deployment; verify adequacy of remaining liquidity runway.

Accounts Receivable
Balance Sheet
+30.6%
$589.0M→$769.0M

Receivables surged 30.6% — revenue recognized but not yet collected; watch for collection issues or channel stuffing.

Current Liabilities
Balance Sheet
+29.9%
$562.0M→$730.0M

Current liabilities rose 29.9% — increased short-term obligations, watch current ratio.

Inventory
Balance Sheet
-24.5%
$23.7M→$17.9M

Inventory reduced 24.5% — lean inventory management or demand outpacing supply.

LANGUAGE CHANGES
NEW — 2026-02-17
PRIOR — 2025-02-13
ADDED
As of February 13, 2026, there were 33,370,258 shares of the registrant's common stock outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 27 ITEM 7A.
into our business and realize all the anticipated benefits of the transaction; and our significant indebtedness.
Our classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction and lighting equipment.
Our equipment rental business is supported by Herc Rentals ProSolutions ("ProSolutions") our industry-specific solutions-based services, which includes power generation, climate control, remediation and restoration, pump, trench shoring, and our Herc Rentals ProContractor ("ProContractor") professional grade tools.
National accounts represented 49% of equipment rental revenue for the year ended December 31, 2025.
In 2025, we accelerated the growth of our footprint with the acquisition of H E Equipment Services, Inc.
("H E"), adding approximately 160 locations, over 2,500 team members and rental equipment primarily consisting of high-quality general rental categories including aerial, earthmoving, and material handling equipment.
We continue to take meaningful actions to advance our 2030 sustainability goals including (i) reducing our Scope 1 and 2 greenhouse gas ("GHG") emission intensity by 25%; (ii) reducing our non-toxic waste intensity to landfill by 25%, and (iii) reducing Total Reportable Incident Rate ("TRIR") of 0.49 or lower.
These goals were set based on our 2019 performance and assessment of relevant sustainability topics.
REMOVED
As of February 7, 2025, there were 28,455,466 shares of the registrant's common stock outstanding.
Management's Discussion and Analysis of Financial Condition and Results of Operations 26 ITEM 7A.
Our classic fleet includes aerial, earthmoving, material handling, trucks and trailers, air compressors, compaction and lighting.
Our equipment rental business is supported by ProSolutions , our industry-specific solutions-based services, which includes power generation, climate control, remediation and restoration, pump, trench shoring, studio and production equipment, and our ProContractor professional grade tools.
National accounts represented 45% of equipment rental revenue for the year ended December 31, 2024.
We have established three sustainability goals that we aim to achieve by 2030 compared to our 2019 baseline: (i) reduce our Scope 1 and 2 greenhouse gas emission intensity by 25%; (ii) reduce our non-toxic waste intensity to landfill by 25%, and (iii) reduce Total Reportable Incident Rate ("TRIR") of 0.49 or lower.
In 2024, we announced exceeding our greenhouse gas ("GHG") intensity target and nearly meeting our non-toxic waste intensity target.
We continue to strongly focus on safety to further our TRIR goal and are evaluating setting new environmental goals to motivate ongoing progress.
Over the past five years, we have laid the foundation for growth and as we continue to invest in the business we will generate surplus capital that we intend to allocate through further investment in rental equipment, strategic acquisitions, distributions to shareholders with a quarterly dividend and opportunistic repurchases under our existing share repurchase program.
As of December 31, 2024, the average age of our equipment rental fleet was 46 months.
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