SeaCube Container Leasing Ltd. Reports Third Quarter 2012 Results

  SeaCube Container Leasing Ltd. Reports Third Quarter 2012 Results

Third Quarter 2012 and Year-to-Date Highlights

  *For the third quarter, adjusted net income increased 15% year-over-year to
    $12.8million, or $0.63 per diluted common share. Third quarter net income
    increased 30% year-over-year to $11.4million.
  *Declared a dividend of $0.30 per share, an increase of 3.4% from the prior
    quarter.
  *Total revenue increased 9% year-over-year to $49.5 million for the third
    quarter.
  *Average utilization was 97.9% for the third quarter.
  *Committed to purchase approximately $318.8million in equipment for
    delivery through January 2013; 85% has been committed to long-term leases.

Business Wire

PARK RIDGE, N.J. -- November 05, 2012

SeaCube Container Leasing Ltd (SeaCube) (NYSE: BOX), one of the world’s
largest lessors of intermodal freight containers, today reported results for
the third quarter ended September 30, 2012.

Adjusted net income^(1) was $12.8million for the third quarter of 2012
compared to $11.1million in the third quarter of 2011, an increase of 15%.
For the third quarter of 2012, adjusted net income per diluted common share
was $0.63. The Company focuses on adjusted net income because it excludes the
impact of non-cash interest expense and non-recurring items that are unrelated
to the operating performance of the business.

Total revenue was $49.5 million for the third quarter of 2012 compared to
$45.2million for the third quarter of 2011, an increase of 9%. Utilization
continued to be strong with average third quarter utilization of 97.9%.
Adjusted EBITDA^(1) was $74.2million for the third quarter of 2012 compared
to $61.6million in the third quarter of 2011.

The Company reported net income of $11.4million for the third quarter of 2012
compared to $8.8million for the third quarter of 2011. Net income per diluted
common share was $0.56 for the third quarter of 2012 compared to $0.44 for the
third quarter of 2011.

Joseph Kwok, Chief Executive Officer of SeaCube, commented, “During the third
quarter, SeaCube once again generated strong revenue, earnings, and cash flow.
We also continued to grow our container fleet in manner that meets our
investment criteria. Year to date, we have committed to purchase approximately
$318.8 million in containers, of which 85% are already committed to long-term
lease. We expect our investments in 2012 to continue to positively impact
results.”

Mr. Kwok concluded, “The Board’s decision to increase the dividend for the
seventh time since going public highlights SeaCube’s strong and stable cash
flows. SeaCube has now increased its dividend 50% since the IPO in October
2010 for a cumulative payout of $2.25 per share. With significant capital
available to invest, we will continue to pursue attractive opportunities to
further grow revenues, earnings and cash flow in an effort to provide good
returns for SeaCube shareholders.”

Adjusted net income^(1) was $38.6million for the nine months ended September
30, 2012 compared to $30.8million for the nine months ended September 30,
2011, an increase of 26%. For the nine months ended September 30, 2012,
adjusted net income per diluted common share was $1.91.

Total revenue was $148.0 million for the nine months ended September 30, 2012
compared to $122.8million for the nine months ended September 30, 2011, an
increase of 20%. Adjusted EBITDA^(1) was $215.7million for the nine months
ended September 30, 2012 compared to $175.2million for the nine months ended
September 30, 2011.

The Company reported net income of $34.6million for the nine months ended
September 30, 2012 compared to $27.2million for the nine months ended
September 30, 2011. Net income per diluted common share was $1.71 for the nine
months ended September 30, 2012 compared to $1.35 for the nine months ended
September 30, 2011.

Dividend

On November5, 2012, the Company’s Board of Directors approved and declared a
$0.30 per share cash dividend on its issued and outstanding common shares,
payable on December14, 2012 to shareholders of record at the close of
business on December7, 2012.

Investors' Conference Call

In connection with this earnings release, management will host an earnings
conference call and webcast on Tuesday, November6, 2012 at 10:00 a.m. Eastern
time. The live conference call may be accessed by dialing 1-866-347-8894 (from
within the U.S.) or 1-706-643-5328 (from outside of the U.S.) ten minutes
prior to the scheduled start of the call; please reference "SeaCube Third
Quarter Earnings Call." A simultaneous webcast of the conference call with an
accompanying slide presentation will be available to the public at
www.seacubecontainers.com. A telephonic replay of the conference call will
also be available until 11:59p.m. on Friday, November16, 2012 by dialing
1-855-859-2056 (from within the U.S.) or 1-404-537-3406 (from outside of the
U.S.); please reference access code "43448253."

About SeaCube Container Leasing Ltd.

SeaCube Container Leasing Ltd. is one of the world’s largest container leasing
companies based on total assets. Containers are the primary means by which
products are shipped internationally because they facilitate the secure and
efficient movement of goods via multiple transportation modes, including
ships, rail and trucks. The principal activities of our business include the
acquisition, leasing, re-leasing and subsequent sale of refrigerated and dry
containers and generator sets. We lease our containers primarily under
long-term contracts to a diverse group of the world’s leading shipping lines.
For more information regarding SeaCube Container Leasing Ltd. please visit
www.seacubecontainers.com.

Safe Harbor

Certain items in this press release and other information we provide from time
to time, may constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 including, but not
necessarily limited to, statements relating to future events and financial
performance. You can identify these forward-looking statements by the use of
forward-looking words such as ‘‘outlook,’’ ‘‘believes,’’ ‘‘expects,’’
‘‘potential,’’ ‘‘continues,’’ ‘‘may,’’ ‘‘will,’’ ‘‘should,’’ ‘‘could,’’
‘‘seeks,’’ ‘‘approximately,’’ ‘‘predicts,’’ ‘‘intends,’’ ‘‘plans,’’
‘‘estimates,’’ ‘‘anticipates,’’ ‘‘target,’’ ‘‘projects,’’ ‘‘contemplates’’ or
the negative version of those words or other comparable words. Any
forward-looking statements contained in this press release are based upon our
historical performance and on our current plans, estimates and expectations in
light of information currently available to us. Such forward-looking
statements are subject to various risks and uncertainties and assumptions
relating to our operations, financial results, financial condition, business,
prospects, growth strategy and liquidity. For a discussion of such risks and
uncertainties, see “Risk Factors” included in our Annual Report on Form 10-K
for the year ended December 31, 2011. Furthermore, SeaCube is under no
obligation to update or alter any of the forward-looking statements contained
in this press release as a result of new information, future events or
otherwise, unless required by law.

^(1) Adjusted net income, adjusted net income per diluted common share, and
adjusted EBITDA are non-GAAP measurements. The Company’s definition and
calculations are outlined in the attached schedules.

SeaCube Container Leasing Ltd.

Consolidated Balance Sheets
(Amounts in thousands, except share data)
(unaudited)
                                                           
                                        September 30, 2012   December 31, 2011
Assets
Cash and cash equivalents               $   18,085           $   15,006
Restricted cash                             34,614               29,649
Accounts receivable, net of allowance       40,832               41,570
of $1,506 and $3,290, respectively
Net investment in direct finance leases     652,606              639,248
Leasing equipment, net of accumulated
depreciation of $166,319 and                847,783              748,945
$171,993, respectively
Goodwill                                    22,483               22,483
Shareholder note                            8,691                8,498
Other assets                               23,652             19,903     
Total assets                            $   1,648,746       $   1,525,302  
Liabilities and shareholders’ equity
                                                             
Liabilities:
Equipment purchases payable             $   54,871           $   26,305
Accrued expenses and other liabilities      31,576               37,097
Fair value of derivative instruments        31,156               38,750
Deferred income                             1,984                2,044
Deferred income taxes                       913                  1,532
Debt:
Due within one year                         181,411              161,171
Due after one year                         1,100,555          1,039,274  
Total debt                                 1,281,966          1,200,445  
Total liabilities                          1,402,466          1,306,173  
Commitments and contingencies
Shareholders’ equity:
Preferred shares, $0.01 par value,          —                    —
100,000,000 shares authorized
Common shares, $0.01 par value,
400,000,000 shares authorized;
20,288,359 shares issued and                202                  201
outstanding at September 30, 2012;
20,163,359 shares issued and
outstanding at December 31, 2011
Additional paid in capital                  220,199              218,879
Retained earnings                           50,650               32,916
Accumulated other comprehensive income     (24,771     )       (32,867    )
(loss)
Total shareholders’ equity                 246,280            219,129    
Total liabilities and shareholders’     $   1,648,746       $   1,525,302  
equity

SeaCube Container Leasing Ltd.

Consolidated Statements of Operations
(Amounts in thousands, except per share amounts)
(unaudited)
                                                       
                                   Three months ended    Nine months ended
                                   September 30,         September 30,
                                   2012      2011       2012       2011
Revenues:
Equipment leasing revenue          $ 30,754   $ 28,726   $ 90,707    $ 75,444
Finance revenue                      16,213     13,945     49,102      40,281
Other revenue                       2,531     2,558     8,147      7,089
Total revenues                      49,498    45,229    147,956    122,814
Expenses:
Direct operating expenses            1,306      2,092      4,134       4,341
Selling, general and                 5,949      5,996      18,158      17,641
administrative expenses
Depreciation expenses                13,328     12,242     39,485      33,159
Provision for doubtful accounts      224        180        894         220
Impairment of leasing equipment      536        539        1,946       904
held for sale
Interest expense, including
non-cash interest of $1,420,         17,763     15,424     51,370      39,283
$2,320, $4,031 and $3,559,
respectively
Interest income                      (71)       (68)       (209)       (211)
Other expenses (income), net        (949)     6         (2,268)    438
Total expenses                      38,086    36,411    113,510    95,775
                                                                     
Income before provision for income   11,412     8,818      34,446      27,039
taxes
Provision (benefit) for income      —         35        (127)      (142)
taxes
Net income                         $ 11,412   $ 8,783    $ 34,573    $ 27,181
Net income per common share
Basic                              $ 0.56     $ 0.44     $ 1.71      $ 1.35
Diluted                            $ 0.56     $ 0.44     $ 1.71      $ 1.35
Dividend per common share          $ 0.29     $ 0.24     $ 0.83      $ 0.68

Non-GAAP Financial Measure

Adjusted earnings before interest, taxes, depreciation and amortization
(“adjusted EBITDA”) is a measure of financial and operating performance that
is not defined by U.S.GAAP and should not be considered a substitute for net
income, income from operations or cash flow from operations, as determined in
accordance with U.S.GAAP.

We define adjusted EBITDA as income (loss) from continuing operations before
income taxes, interest expenses including loss on retirement of debt,
depreciation and amortization, fair value adjustments on derivative
instruments, loss on terminations and modification of derivative instruments,
gain on sale of assets, and write-offs of goodwill plus principal collections
on direct finance lease receivables. We use adjusted EBITDA in a number of
ways to assess our consolidated financial and operating performance, and we
believe this measure is helpful to management, the board of directors and
investors in identifying trends in our performance. We use adjusted EBITDA as
a measure of our consolidated operating performance exclusive of income and
expenses that relate to the financing, income taxes, and capitalization of the
business. Also, adjusted EBITDA assists us in comparing our operating
performance on a consistent basis as it removes the impact of our capital
structure (primarily interest charges on our outstanding debt) and asset base
(primarily depreciation and amortization) from our operating results. In
addition, adjusted EBITDA helps management identify controllable expenses and
make decisions designed to help us meet our current financial goals and
optimize our financial performance. Accordingly, we believe this metric
measures our financial performance based on operational factors that
management can impact in the short-term, namely the cost structure and
expenses of the organization. Lastly, adjusted EBITDA is the basis for
calculating selected financial ratios as required in the debt covenants of one
of our credit facilities and one of our management agreements.

The following table shows the reconciliation of net income, the most directly
comparable U.S.GAAP measure to adjusted EBITDA:

SeaCube Container Leasing Ltd.

Non-GAAP Reconciliation of Adjusted EBITDA

(Amounts in thousands)

(unaudited)
                                            
                    Three months ended         Nine months ended September 30,
                    September 30,
                    2012         2011         2012             2011
Net income          $  11,412     $  8,783     $  34,573         $  27,181
Provision
(benefit) for          —             35           (127     )        (142     )
income taxes
Depreciation           13,328        12,242       39,485            33,159
expenses
Interest expense,
net of interest        17,692        15,356       51,161            39,072
income
Collections on
net investment in                                                
direct financing
leases, net of        31,740       25,173      90,601          75,936   
interest earned
Adjusted EBITDA     $  74,172     $  61,589    $  215,693       $  175,206  

In addition, the Company has presented adjusted net income and adjusted net
income per diluted common share as a measure of financial and operating
performance. Adjusted net income is a measure that is not defined by U.S.GAAP
and should not be considered a substitute for net income, income from
operations or cash flow from operations, as determined in accordance with
U.S.GAAP. Adjusted net income is a measure of our operating and financial
performance used by management to focus on consolidated financial and
operating performance exclusive of income and expenses that relate to
non-routine or significant non-cash items of the business.

We define adjusted net income (loss) as net income before non-cash interest
expense related to amortization of deferred financing fees, terminations and
modifications of derivative instruments, losses on retirement of debt, fair
value adjustments on derivative instruments, loss on swap terminations, and
write-offs of goodwill. We use adjusted net income to assess our consolidated
financial and operating performance, and we believe this non-GAAP measure is
helpful to management and investors in identifying trends in our performance.
This measure helps management make decisions which are expected to facilitate
meeting current financial goals as well as achieve optimal financial
performance. Adjusted net income provides us with a measure of financial
performance of the business based on operational factors including the
profitability of assets on an economic basis net of operating expenses and the
capital costs of the business on a consistent basis as it removes the impact
of certain non-routine and non-cash items from our operating results. Adjusted
net income is a key metric used by senior management and our board of
directors to review the consolidated financial performance of the business.
Adjusted net income is a non-GAAP measure, and, as such, a reconciliation of
adjusted net income to net income is provided below.

SeaCube Container Leasing Ltd.

Non-GAAP Reconciliation of Adjusted Net Income

(Amounts in thousands, except share and per share data)

(unaudited)
                                              
              Three Months Ended September 30,   Nine Months Ended September
                                                 30,
              2012             2011             2012            2011
Net income    $  11,412         $  8,783         $  34,573        $ 27,181
Non-cash
interest        1,420            2,328           4,046          3,579
expense,
net of tax
Adjusted      $  12,832         $  11,111        $  38,619        $ 30,760
net income
                                                                  
Adjusted
net income
per diluted   $  0.63           $  0.55          $  1.91          $ 1.53
common
share
                                                                  
Common
shares used
in
computing
adjusted        20,288,359       20,163,359      20,263,724     20,135,811
net income
per diluted
common
share

Contact:

SeaCube Container Leasing Ltd
Investor:
David Doorley, 201-391-0800
 
Press spacebar to pause and continue. Press esc to stop.