RSC Reports 3Q09 Results, Provides 4Q09 Outlook and Increases FY09 Free Cash Flow Outlook

http://www.businesswire.com/news/home/20091029006321/en

* Rental revenues $272 million down 35% vs. 3Q08
* DEPS a loss of $0.06, down from DEPS of $0.41 in 3Q08
* Adjusted EBITDA $107 million or 34.0% of total revenues
* Free cash flow $125 million
* FY09 free cash flow forecast increased to $365 - $380 million

SCOTTSDALE, Ariz.--(Business Wire)--
RSC Holdings Inc. (NYSE: RRR), one of the largest equipment rental providers in
North America, today announced results for the third quarter ended September 30,
2009.

Erik Olsson, President and Chief Executive Officer, stated: "We executed well on
our top priorities - customer service, cost controls and cash flow generation.
While we did not experience the typical seasonal upturn in volume, we achieved
stability throughout the quarter in demand for our fleet, sequential rental
rates and utilization. We delivered an impressive $125 million of free cash
flow, clearly demonstrating the results of strong execution and the
counter-cyclicality of our business model. Although the economic environment
remains weak, we expect to deliver free cash flow of $365 - $380 million for the
full year, which is above our previous estimate."

Third Quarter 2009 Results

Third quarter rental revenues decreased 35.1% to $272 million, from $419 million
in the year-ago quarter, and accounted for 86% of total revenues. Total revenues
were $316 million, down 32.4% from $467 million reported in the year-ago
quarter.

Rental volume declined 25.7% from the prior year`s third quarter following the
drop in non-residential construction business levels and lower industrial
activity. Rental rates declined by 9.4% compared with the year-ago quarter;
however, the company achieved a 0.2% sequential increase in rental rates over
the second quarter. Fleet utilization averaged 58.9% vs. 72.3% in the third
quarter of 2008.

Sales of used rental equipment were $31 million, increasing from $29 million in
last year`s third quarter. Gross profit margin on sales of used rental equipment
was 4%, down from 8% in the first half of 2009, reflecting higher-than-normal
auction sales and lower retail margins.

Gross capital expenditures were $16 million and the company generated net
capital expenditure inflows of $18 million in the third quarter, continuing to
benefit from a well-maintained fleet which minimized replacement needs.

The company continued to aggressively manage its cost structure, reducing cost
of rental and SG&A expenses by $57 million versus the third quarter a year ago.
In the quarter headcount was reduced by 186 employees, while location closures
were limited to one. Since the beginning of 2008, the company has closed 59 or
12% of its locations and reduced headcount by 1,215 or 22%. The company also
opened two locations in the quarter, bringing total openings in 2009 to 16,
primarily in locations that presented industrial growth opportunities.
Industrial/non-construction revenues accounted for 55% of total rental revenues
in the third quarter of 2009.

"We have been diligent in taking the necessary actions to reduce our cost
structure and, as a result, we remain on track to achieve more than $150 million
of operating cost reductions this year, while improving our best-in-class
customer service. We continue to allocate resources to the industrial markets,
expanding and improving our service offering for new and existing customers
alike. Since the beginning of 2008 we have opened 43 new locations and deployed
industrial business development managers throughout our regions. By proactively
industrializing our business and thereby reducing our exposure to commercial
construction, we are positioning the company to emerge stronger when the
industrial cycle turns," Mr. Olsson added.

Operating income was $25 million, or 8.0% of total revenues, compared with $110
million or 23.6% of total revenues in the prior year period. The impact of the
rental revenue decline exceeded the benefits of cost reductions. Third quarter
adjusted EBITDA was $107 million or 34.0% of total revenues, compared to $206
million or 44.1% of total revenues last year.

Interest expense was $51 million, an increase of $2 million over the third
quarter 2008, as costs related to the company`s new senior secured notes and
recently-extended ABL credit facility more than offset the favorable impact of
reduced debt levels. A $12 million net gain, after fees and deferred financing
cost write-off, was realized upon the prepayment of debt.

A third quarter net loss of $6 million or $0.06 per diluted share was realized,
compared with net income of $42 million or $0.41 per diluted share in the third
quarter of 2008.

Free cash flow of $125 million compares with $94 million in the prior year third
quarter. For the first nine months of 2009, free cash flow of $332 million
represents an improvement of $188 million over $143 million in the first nine
months of the prior year. Total debt was reduced by $109 million during the
third quarter and by $321 million in the first nine months of 2009, to $2,248
million.

Capital Structure Transactions

In July, as previously announced, the company issued $400 million of 8-year
senior secured notes with a coupon rate of 10.0%. The net proceeds were used to
repay the term loan and a portion of the outstanding revolver borrowings under
the ABL credit facility. Working with its lenders, the company also amended the
ABL, extending the maturity of 75%of the facility from November 2011 to August
2013 and reducing the total commitments to $1.1 billion. Borrowing availability
under the ABL increased from $373 million at June 30, 2009 to $647 million at
September 30, 2009.

In August, the company and its lenders amended the senior secured second-lien
term loan facility, permitting RSC to make voluntary prepayments of up to $300
million at a discount to the principal amount during the following twelve
months. During the third quarter the company prepaid $158 million of such term
loans at 87% of face value and, in October, another $70 million at 91% of face
value.

Mr. Olsson concluded: "The $321 million reduction of debt in the first nine
months of 2009 and the major refinancing of the company in the third quarter
enhanced liquidity and extended maturities, providing significant financial and
operational flexibility going forward. We are executing our strategy to continue
to have a flexible and low cost capital structure to support near and long term
growth in our business."

Outlook for 4Q09 and FY09

Business activity in the company`s served markets will continue to be down
significantly on a year-over-year basis and visibility remains limited. In
addition, demand is expected to decline sequentially during the seasonal
slowdown of the winter months and industry-wide fleet levels will continue to
exceed demand. As a result rental rates are expected to remain under pressure.

The company is increasing previously provided free cash flow guidance to $365 -
$380 million for the full year 2009 and expects to continue to apply available
cash to further reduce debt. Results are expected in the ranges that follow:

Q409
Rental revenues $230 - $245 million
Total revenues $265 - $280 million
Adjusted EBITDA $ 70 - $ 85 million
Free cash flow $ 35 - $ 50 million

FY09
Free cash flow $365 - $380 million

Conference Call Information

RSC Holdings will hold a conference call today at 5:15 p.m. Eastern Time.
Investors may access the call by visiting the investor relations portion of the
RSC website at www.RSCrental.com/Investor. To listen to the live conference call
from the U.S. and Canada dial (866) 393-7634; from international locations dial
(706) 679-0678. A replay of the conference call will be available through
November 15, 2009. To access the replay dial: U.S. and Canada: (800) 642-1687;
international (706) 645-9291. Pass code: 33302602. A replay of the webcast will
also be available at www.RSCrental.com/Investor.

Investor Presentation Information

Information concerning our business and financial results that we expect to use
at upcoming investor presentations will be made available on our website
immediately following the conference call and will be maintained on our website
for at least the period of its use at such meetings or until updated by more
current information.

About RSC Holdings Inc.

RSC Holdings Inc. (NYSE: RRR) based in Scottsdale, Arizona, is the holding
company for the operating entity RSC Equipment Rental, Inc. ("RSC"), which is a
premier provider of rental equipment in North America, servicing the industrial,
maintenance and non-residential construction markets with $2.4 billion of
equipment at original cost. RSC offers superior equipment availability,
reliability and 24x7 service to customers through an integrated network of 464
branch locations across 40 states in the United States and three provinces in
Western Canada. Customer solutions to improve efficiency and reduce cost include
the proprietary Total Control rental management software, Mobile Tool Rooms and
on-site rental locations. With 4,300 employees committed to safety and
sustainability, RSC delivers the best value and industry leading customer
service. All information is as of September 30, 2009. Additional information
about RSC is available at www.RSCrental.com.

Forward Looking Statements

This press release contains certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements are based on management`s
current expectations and are subject to uncertainty and changes in factual
circumstances. The forward-looking statements herein include statements
regarding the company`s future financial position, end-market outlook, business
strategy, budgets, projected costs and plans and objectives of management for
future operations.

In addition, forward-looking statements generally can be identified by the use
of forward-looking terminology such as "may", "plan", "seek", "will", "expect",
"intend", "estimate", "anticipate", "believe" or "continue" or the negative
thereof or variations thereon or similar terminology. Actual results and
developments may therefore differ materially from those described in this
release.

The company cautions therefore that you should not rely unduly on these
forward-looking statements. You should understand the risks and uncertainties
discussed in "Risk Factors" and elsewhere in the company`s Annual Report on Form
10-K and Quarterly Reports on Form 10-Q as filed with the United States
Securities and Exchange Commission could affect the company`s future results and
could cause those results or other outcomes to differ materially from those
expressed or implied in the company`s forward-looking statements.

These forward-looking statements are not guarantees of future performance and
speak only as of the date hereof, and, except as required by law, we disclaim
any obligation to update these forward-looking statements to reflect future
events or circumstances.

Non-GAAP Financial Information

In addition to disclosing financial results that are determined in accordance
with U.S. generally accepted accounting principles ("GAAP"), the company also
discloses in this press release certain non-GAAP financial information including
adjusted EBITDA and free cash flow. These financial measures are not recognized
measures under GAAP and they are not intended to be and should not be considered
in isolation or as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. For more information on these
non-GAAP financial measures, please see the tables captioned "Adjusted EBITDA
GAAP Reconciliation" and "Free Cash Flow GAAP Reconciliation" included at the
end of this release. Additionally, explanations of these Non-GAAP measures are
provided in Annex A attached to this release.

RSC HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

Three Months Ended Nine Months Ended
September 30, Change September 30, Change
2009 2008 % 2009 2008 %
Revenues:
Equipment rental revenue $ 271,547 $ 418,604 (35.1 ) % $ 829,517 $ 1,195,782 (30.6 ) %
Sale of merchandise 12,633 18,906 (33.2 ) 40,121 56,152 (28.5 )
Sale of used rental equipment 31,384 29,357 6.9 123,757 86,043 43.8
Total revenues 315,564 466,867 (32.4 ) 993,395 1,337,977 (25.8 )
Cost of revenues:
Cost of equipment rentals, excluding depreciation 138,723 182,747 (24.1 ) 423,567 521,837 (18.8 )
Depreciation - rental equipment 70,169 81,869 (14.3 ) 217,492 239,331 (9.1 )
Cost of merchandise sales 8,775 13,325 (34.1 ) 28,193 38,159 (26.1 )
Cost of used rental equipment sales 30,117 20,479 47.1 115,414 60,153 91.9
Total cost of revenues 247,784 298,420 (17.0 ) 784,666 859,480 (8.7 )
Gross profit 67,780 168,447 (59.8 ) 208,729 478,497 (56.4 )
Operating expenses:
Selling, general and administrative 31,970 45,271 (29.4 ) 107,096 125,983 (15.0 )
Depreciation and amortization - non-rental equipment and intangibles 10,696 12,603 (15.1 ) 33,672 37,214 (9.5 )
Other operating (gains) losses, net (119 ) 276 n/a (233 ) (789 ) n/a
Total operating expenses, net 42,547 58,150 (26.8 ) 140,535 162,408 (13.5 )
Operating income 25,233 110,297 (77.1 ) 68,194 316,089 (78.4 )
Interest expense, net 50,666 48,296 4.9 130,911 152,399 (14.1 )
Gain on extinguishment of debt, net (12,489 ) - n/a (12,489 ) - n/a
Other (income) expense, net (75 ) 327 n/a 335 (316 ) n/a
(Loss) income before (benefit) provision for income taxes (12,869 ) 61,674 n/a (50,563 ) 164,006 n/a
(Benefit) provision for income taxes (7,034 ) 19,325 n/a (19,734 ) 59,235 n/a
Net (loss) income $ (5,835 ) $ 42,349 n/a $ (30,829 ) $ 104,771 n/a

Weighted average shares outstanding used in computing net (loss) income per common share:
Basic 103,435 103,303 103,433 103,229
Diluted 103,435 103,602 103,433 103,806

Net (loss) income per common share:
Basic and Diluted $ (0.06 ) $ 0.41 $ (0.30 ) $ 1.01

Other operational data:
Utilization (a) 58.9 % 72.3 % 58.0 % 70.9 %
Average fleet age at period end (months) 38 31 38 31
Same store rental revenue growth / (decline) (a) (34.2 ) % 1.8 % (28.4 ) % 4.7 %
Employees (a) 4,327 5,329 4,327 5,329
Original equipment fleet cost (in millions) (a) $ 2,394 $ 2,771 $ 2,394 $ 2,771

(a) Refer to attached Statistical Measures for descriptions.

Note: Certain amounts in the condensed consolidated statements of operations for the quarter and nine-month periods ended September 30, 2008 have been reclassified to conform with the current year presentation. The Company believes the current presentation better reflects the nature of the underlying financial statement items. The reclassifications have no effect on operating income, net income or net income per common share.

RSC HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)

September 30, December 31,
2009 2008

Assets
Cash and cash equivalents $ 18,990 $ 13,670
Accounts receivable, net 210,204 285,000
Inventory 15,275 19,859
Rental equipment, net 1,472,765 1,766,978
Property and equipment, net 132,391 171,156
Goodwill and other intangibles, net 940,253 938,682
Deferred financing costs 56,881 46,877
Other assets 22,059 28,306
Total assets $ 2,868,818 $ 3,270,528

Liabilities and Stockholders` Equity
Accounts payable $ 49,609 $ 109,542
Accrued expenses and other liabilities 202,824 203,288
Debt 2,248,146 2,569,067
Deferred income taxes 339,010 345,511
Total liabilities 2,839,589 3,227,408
Total stockholders` equity 29,229 43,120
Total liabilities and stockholders` equity $ 2,868,818 $ 3,270,528

RSC HOLDINGS INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

Nine Months Ended
September 30,
2009 2008
Cash flows from operating activities:
Net (loss) income $ (30,829 ) $ 104,771
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization 251,164 276,545
Amortization of deferred financing costs 8,574 7,281
Amortization of original issue discount 213 -
Share-based compensation expense 3,473 2,797
Gain on sales of rental and non-rental property and equipment, net of non-cash writeoffs (6,329 ) (23,828 )
Deferred income taxes (8,618 ) 22,274
Gain on extinguishment of debt, net (12,489 ) -
Excess tax benefits from share-based payment arrangements - (141 )
Changes in operating assets and liabilities 25,058 (94,334 )
Net cash provided by operating activities 230,217 295,365
Cash flows from investing activities:
Cash paid for acquisition, net of cash acquired - (33,236 )
Purchases of rental equipment (33,488 ) (230,464 )
Purchases of property and equipment (2,597 ) (12,205 )
Proceeds from sales of rental equipment 123,757 86,043
Proceeds from sales of property and equipment 10,539 4,350
Insurance proceeds from rental equipment and property claims 3,086 -
Net cash provided by (used in) investing activities 101,297 (185,512 )
Cash flows from financing activities:
Net payments on debt (301,363 ) (124,593 )
Financing costs (26,435 ) (580 )
Proceeds from stock option exercises 256 1,339
Other 347 4,342
Net cash used in financing activities (327,195 ) (119,492 )
Effect of foreign exchange rates on cash 1,001 (127 )
Net increase (decrease) in cash and cash equivalents 5,320 (9,766 )
Cash and cash equivalents at beginning of period 13,670 10,039
Cash and cash equivalents at end of period $ 18,990 $ 273

Supplemental disclosure of cash flow information:
Cash paid for interest $ 104,402 $ 137,630
Cash (received) paid for taxes, net (7,098 ) 23,422

RSC HOLDINGS INC. AND SUBSIDIARIES
Rental Revenue Growth Bridge
(in thousands)

Rental Revenues

Three Months Ended Nine Months Ended
September 30, September 30,

2008 $ 418,604 $ 1,195,782

Changes:
Volume -25.5 % -23.6 %
Acquisition 0.0 % 0.5 %
Price -9.4 % -7.0 %
Currency -0.2 % -0.5 %

2009 $ 271,547 $ 829,517

Annex A

EBITDA and Adjusted EBITDA. EBITDA, a supplemental non-GAAP financial measure,
is defined as consolidated net income (loss) before net interest expense, income
taxes and depreciation and amortization. Adjusted EBITDA as presented herein is
a non-GAAP financial measure and is defined as consolidated net income (loss)
before net interest expense, income taxes, and depreciation and amortization and
before certain other items, including gain on extinguishment of debt, net,
share-based compensation, and other (income) expense, net. All companies do not
calculate EBITDA and Adjusted EBITDA in the same manner, and RSC Holdings`
presentation may not be comparable to those presented by other companies.

The company presents EBITDA and Adjusted EBITDA in this release because it
believes these calculations are useful to investors in evaluating our ability to
service debt and as tools to evaluate our financial performance. However, EBITDA
and Adjusted EBITDA are not recognized measurements under GAAP, and when
analyzing the company`s performance, investors should use EBITDA and Adjusted
EBITDA in addition to, and not as an alternative to, net income or net cash
provided by operating activities as defined under GAAP.

Free cash flow. The company defines free cash flow as net cash provided by
operating activities less net capital inflows (expenditures). All companies do
not calculate free cash flow in the same manner, and RSC Holdings` presentation
may not be comparable to those presented by other companies. We believe free
cash flow provides useful additional information concerning cash flow available
to meet future debt service obligations and working capital needs. However, free
cash flow is a non-GAAP measure and should be used in addition to, and not as an
alternative to, data presented in accordance with GAAP.

The accompanying tables reconcile the GAAP financial measures that are most
directly comparable to these non-GAAP financial measures. No quantitative
reconciliations of the estimated ranges for Adjusted EBITDA and free cash flow
to their respective most comparable measure calculated and presented in
accordance with GAAP are included as the company is unable to quantify certain
amounts that would be required to be included in such GAAP measures.

RSC HOLDINGS INC. AND SUBSIDIARIES
Adjusted EBITDA GAAP Reconciliation
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net (loss) income $ (5,835 ) $ 42,349 $ (30,829 ) $ 104,771
Depreciation of rental equipment and depreciation and amortization of non-rental equipment and intangibles 80,865 94,472 251,164 276,545
Interest expense, net 50,666 48,296 130,911 152,399
(Benefit) provision for income taxes (7,034 ) 19,325 (19,734 ) 59,235
EBITDA $ 118,662 $ 204,442 $ 331,512 $ 592,950

Adjustments:
Gain on extinguishment of debt, net (12,489 ) - (12,489 ) -
Share-based compensation 1,179 957 3,473 2,797
Other (income) expense, net (75 ) 327 335 (316 )
Adjusted EBITDA $ 107,277 $ 205,726 $ 322,831 $ 595,431
(Adjusted EBITDA as a percentage of total revenues) 34.0 % 44.1 % 32.5 % 44.5 %

Free Cash Flow GAAP Reconciliation
(in thousands)

Three Months Ended Nine Months Ended
September 30, September 30,
2009 2008 2009 2008
Net cash provided by operating activities $ 107,033 $ 131,260 $ 230,217 $ 295,365

Purchases of rental equipment (15,151 ) (65,506 ) (33,488 ) (230,464 )
Purchases of property and equipment (708 ) (2,182 ) (2,597 ) (12,205 )
Proceeds from sales of rental equipment 31,384 29,357 123,757 86,043
Proceeds from sales of property and equipment 2,409 1,325 10,539 4,350
Insurance proceeds from rental equipment and property claims - - 3,086 -
Net capital inflows (expenditures) 17,934 (37,006 ) 101,297 (152,276 )

Free cash flow $ 124,967 $ 94,254 $ 331,514 $ 143,089

Statistical Measures

Utilization is defined as the average dollar value of equipment rented by
customers (based on original equipment cost) for the relevant period divided by
the aggregate dollar value of all equipment (based on original cost) for all
equipment.

Same store rental revenue growth is calculated as the year over year change in
rental revenue for locations that are open at the end of the period and have
been operating under the company`s direction for more than 12 months.

Employee count is given at the end of the period indicated and the data reflect
the actual head count as of each period.

Original Equipment Fleet Cost (OEC) is defined as the original dollar value of
equipment purchased from the original equipment manufacturer (OEM). Fleet
purchased from non-OEM sources is assigned a comparable OEC dollar value at the
time of purchase.

For RSC Holdings Inc.
Investor/Analyst Contacts:
Gerry Gould, VP - Investor Relations
(480) 281-6928
Gerry.Gould@RSCRental.com
or
Media Contact:
Chenoa Taitt
(212) 223-0682

Copyright Business Wire 2009