The story of the first 50 years of H&E Equipment Services is much like the construction industry itself from 1961 to 2011. It started relatively small, overcame some difficult periods to record remarkable growth, and is poised to take off again once the economy picks up steam.
From the time when Frank Head and Tom Engquist started Head & Engquist in a single store in Baton Rouge, La., half a century ago, H&E now has 67 locations nationwide. It has facilities literally coast-to-coast — from Baltimore to San Diego — in all the Mid-Atlantic states and Florida, all the Gulf Coast states and Texas, all the Pacific Coast states, including six locations in California, and the entire intermountain region. With approximately 1,600 employees and more than 16,000 machines in its fleet, H&E is the 11th-largest equipment-rental company in the United States, according to RER (Rental Equipment Register) 2010 “Top 100.” It also is a leading seller of earthmoving machines and one of the largest Manitowoc/Grove crane dealers in the world.
Much of the company’s growth has occurred under the watch of Tom’s son John Engquist, who joined H&E full time in 1975 after attending Louisiana State University. Today, he serves as President and CEO.
“I love the equipment industry,” said John Engquist. “Obviously, I was born into it. In high school and college, I worked summers in the shop as a mechanic’s helper and such. But beyond my history with it, I just plain like the business, especially the people. Our customer base consists of hardworking, entrepreneurial, down-to-earth individuals who are straight-shooters. What you see is what you get, and if you can supply what they need and treat them right, they tend to be pretty loyal.”
H&E’s expansion started with a branch location in Kenner (New Orleans area), La., in 1978, followed by Louisiana branches in Shreveport, Lake Charles and Alexandria and, later, in Arkansas. The company expanded into Texas with the purchase of South Texas Equipment and landed the Manitowoc line by acquiring Martin Equip and Coastal Crane. Then in 2002, Engquist made a bold move, merging with ICM, which had about twenty stores in western states, to form H&E Equipment Services. In 2006, H&E acquired the assets of Eagle High Reach and opened full-service branches in southern California. One year later, H&E acquired the assets of longtime East Coast dealer J.W. Burress.
“Growth has always been part of our plan,” said Engquist. “I believe a company has to evolve and improve or, eventually, it’s going to go the other way. We looked for opportunities that we thought would allow us to expand profitably, and when those were available, we made the moves. Certainly, when we put ICM and Head & Engquist together, in our opinion, it created a much-improved entity. It was a case of one plus one equaling not two, but three or four. I liked what it did in terms of broadening our footprint and making us more diversified.”
While the company has grown dramatically, Engquist says H&E’s primary focus remains the same as when it was operating out of its one location in Baton Rouge.
“Customer service — the ability and willingness to do what it takes to meet the needs of the end user — is what truly separates one equipment dealer from another. At H&E, that’s what we hang our hat on. We believe the products we carry are industry leaders, but we’ll acknowledge there is a lot of good equipment out there today. Customer support is what can differentiate one dealer from another, and at H&E, we try to deliver support that is unrivaled in our territories.”
Optimistic About the Future
Like all equipment distributors, H&E took its lumps during the recession, but Engquist says he’s optimistic about the future.
“We think the construction economy has finally bottomed and we’re now beginning to cycle back up. We believe that 2011 is going to be better than 2010, and that 2012 will be significantly better than 2011.”
What does that mean for H&E? It means the company expects to continue growing.
“When the downturn started, we took the position that we were going to control our costs, protect our balance sheet and position ourselves to take advantage of the recovery when it arrived,” Engquist explained. “Now that the recovery appears to have begun, we hope to open some new locations in the near future as opportunities arise. We’re not aggressively looking for acquisitions, but we’ll examine any opportunity that makes sense for us. I do think there’s going to continue to be consolidation in the distribution industry. At H&E, we intend to be one of the companies that’s growing rather than shrinking.”
Reprinted with permission from H&E Equipment Services. CEG