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Frost & Sullivan Recognizes Electro Rent Corporation's Rise in the North American Rental and Distributed Test Equipment Market

Company adopts aggressive strategies to blaze ahead of competition

MOUNTAIN VIEW, Calif. - Mar. 1, 2012 - Based on its recent analysis of the rental, used and new test equipment market in North America, Frost & Sullivan recognizes Electro Rent Corporation (Electro Rent) with the 2012 Frost & Sullivan Award for Company of the Year. Ranking second a couple of years ago in the North American rental general purpose test equipment market, Electro Rent has witnessed tremendous revenue growth over the past two years.

With customers hesitant to make capital investments in test equipment, vendors in the highly mature and competitive North American market are challenged to not only provide clients with cost savings but also stave off competition from leaders in other regions that are trying to tap into the North American market. In spite of such intimidating conditions, Electro Rent's overall rental test and measurement business passed the $110 million milestone in 2011, with more than 85 percent of its revenues coming from the United States. The company has also made admirable strides in Canada.

"The strong customer focus on Return on Invested Capital (ROIC) that made renting a more natural alternative for customers was an opportunity that Electro Rent leveraged to the maximum," said Frost & Sullivan Industry Director Jessy Cavazos. "The company's growth over the past two years is the result of significant risk-taking, both in investing toward its rental inventory and taking on the responsibility to sell new test equipment."

Electro Rent bought a substantial amount of equipment in 2011 that complemented the existing rental pool from the acquisitions of Telogy, LLC and Equipment Management Technology (EMT). It also expanded the breadth and depth of its rental inventory to penetrate more verticals. Besides radio frequency/microwave testing for aerospace and defense contractors, the company is now catering to the growing needs in the telecommunications space.

"With 4G deployments under way and significant challenges faced in the field by technicians trying to commission Long Term Evolution, the demand for the rental of telecommunications test equipment is expected to increase and contribute to the growth of Electro Rent's rental business for the next two to three years," elaborates Cavazos.

A key element of Electro Rent's strategy in the rental market is product availability. The company's inventory utilization has been at historic highs, despite buying equipment at a greater pace (above 65 percent). Electro Rent monitors its pool carefully and has developed tools internally to monitor different types of equipment and identify high and low utilization areas, allowing it to adjust prices and inventory mix accordingly.

Besides rentals, Electro Rent also saw tremendous success in new equipment sales. The key driver for this is its role as the Authorized Technology Partner (ATP) for Agilent Technologies in the North American region. The resulting boost in new equipment sales revenues in 2011 was more than three times that of 2009 ($36.4 million).

"Electro Rent is responsible for selling the manufacturer's product lines to medium and small accounts in the United States and Canada," noted Cavazos. "To achieve this, Electro Rent took on a $6 million investment in labor costs to bring in fresh talent to address any technical and application questions from the new Agilent customers."

In recognition of its achievements, Frost & Sullivan is proud to present the company with the 2012 Company of the Year Award in the North American rental, used and new test equipment market.

Each year, Frost & Sullivan presents this award to the company that has demonstrated excellence in terms of growth strategy and implementation. The award recognizes a high degree of innovation with products and technologies, and the resulting leadership in terms of customer value and market penetration.

Frost & Sullivan Best Practices Awards recognize companies in a variety of regional and global markets for demonstrating outstanding achievement and superior performance in areas such as leadership, technological innovation, customer service, and strategic product development. Industry analysts compare market participants and measure performance through in-depth interviews, analysis, and extensive secondary research to identify best practices in the industry.

About Electro Rent

Electro Rent Corporation (www.ElectroRent.com) is one of the largest global organizations devoted to the rental, leasing and sale of general purpose electronic test equipment, personal computers and servers.

Contact:

Tanya Jamison
Ph. 818-374-6339
F: 818-786-4354
E: tjamison@electrorent.com

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

Contact:

Mireya Espinoza
P: 210. 247.3870
F: 210.348.1003
E: mireya.espinoza@frost.com

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