McGrath RentCorp Announces Results for Fourth Quarter 2012
McGrath RentCorp Announces Results for Fourth Quarter 2012
Rental revenues increase 4%
EPS decreases 11% to $0.47 for the Quarter
Company announces 2% dividend increase
Business Wire
LIVERMORE, Calif. -- February 21, 2013
McGrath RentCorp (NASDAQ: MGRC) (the “Company”), a diversified business to
business rental company, today announced revenues for the quarter ended
December 31, 2012 of $102.0 million, an increase of 20%, compared to $85.2
million in the fourth quarter of 2011. The Company reported net income of
$11.9 million, or $0.47 per diluted share for the fourth quarter of 2012,
compared to net income of $13.2 million, or $0.53 per diluted share, in the
fourth quarter of 2011.
Total revenues for the year ended December 31, 2012 were $364.1 million,
compared to $342.7 million in 2011. Rental revenues increased 6% to $248.4
million in 2012 compared to $234.9 million in 2011. Net income for the year
ended December 31, 2012 decreased 10% to $44.8 million, compared to net income
of $49.6 million in the prior year. Diluted earnings per share decreased 11%
to $1.78 in 2012 from $2.00 in 2011.
The Company also announced that the board of directors declared a quarterly
cash dividend of $0.24 per share for the quarter ending March 31, 2013, an
increase of 2% over the prior year period. On an annualized basis, the 2013
dividend represents a 3.3% yield, based on the February 20, 2013 closing stock
price. The cash dividend will be payable on April 30, 2013 to all shareholders
of record on April 16, 2013.
Dennis Kakures, President and CEO of McGrath RentCorp, made the following
comments regarding these results and future expectations:
“Although Company-wide rental revenues increased by 4% from a year ago, we had
an 11% decrease in EPS for the quarter. This is primarily the result of lower
rental revenues for Adler relative to its current cost structure. While Adler
rental revenues grew over last year’s fourth quarter by approximately 6%, its
income from operations declined by approximately 39%. Over the past year we
have executed on ramping our tank rental business’s national footprint to
support higher rental revenue and earnings levels in the years ahead. These
costs are primarily related to filling management, sales, office and inventory
center positions, facilities and winch / roll-off tractor infrastructure. This
is all by design. Adler’s profitability was also impacted negatively during
the quarter by $1.3 million higher bad debt write-offs from a year ago.
Finally, we also experienced $0.7 million higher expenses during the quarter
from a year ago in moving underutilized equipment from the dry gas Marcellus
region to other Adler geographies in need of equipment. We have now completed
the great majority of these interregional asset movements and we anticipate
this expense category will be materially lower in 2013. Adler’s average rental
equipment utilization for the fourth quarter 2012 stood at 69.9% compared to
86.8% a year ago, and 68.9% in the third quarter 2012. Our percentage of
overall rental revenue derived from E&P gas and oil fracking declined from a
high of approximately 35% in 2011, to 15% in the fourth quarter of 2012, and
at the same time rental revenues grew by 6%. We have a great tank rental
business, but not without some growing pains. What’s most important is that
Adler is making very good headway in establishing its brand name, high quality
products and exceptional customer experiences over an increasingly larger
geography and customer base, quarter after quarter.
TRS-RenTelco, our electronic test equipment division, rental revenues for the
quarter increased by $1.5 million, or 6% to $26.8 million from a year ago.
Divisional income from operations increased by 18% from the fourth quarter of
2011. The significantly higher percentage increase in profitability as
compared to rental revenues was chiefly related to lower SG&A, laboratory and
equipment depreciation expenses all as a percentage of rental revenues from a
year ago. Our results for TRS-RenTelco continue to reflect its discipline in
strategic focus, strong brand following, operational efficiencies and an
exceptionally talented and tenured work force.
Modular division rental revenues for the quarter were relatively flat at $20.1
million compared to $20.3 million a year ago, and $20.0 million from the third
quarter 2012. Rental revenues grew by 9% quarter over quarter in our markets
outside of California and declined by 9% within the state. Modular rental
revenues outside of California now represent approximately 47% of total
modular rental revenues. First month’s rental bookings for the modular
division increased 26% from a year ago with bookings outside of California
increasing 89% and declining by 15% within the state. Although our California
modular results continue to be depressed due to macroeconomic headwinds, there
are a number of positive indicators going forward. These bright spots include
the successful November 2012 personal income and sales taxes ballot initiative
and its anticipated impact on reversing public education austerity; a December
2012 statewide unemployment rate of 9.8% down from a Great Recession high of
12.6%; scarce inventory of existing homes for sale in some regions as market
prices begin to increase; and a marked pick-up in both non-residential and
residential construction.
Modular division quarter over quarter income from operations decreased by
approximately 8% to $5.6 million from $6.1 million in 2011; however, modular
division gross profit was up slightly to $14.4 million compared to $14.2
million a year ago, and from $13.2 million in the third quarter of 2012.
First, the higher percentage reduction in income from operations relative to
flat rental revenues for the quarter is primarily due to an increase in bad
debt expense, and secondarily to increased SG&A costs in our portable storage
business. The increase in gross profit for the fourth quarter over the third
quarter 2012 relates chiefly to lower inventory center costs incurred.
Finally, average utilization for the fourth quarter 2012 was 66.8%, down
slightly from 67.1% a year ago, however, up from 66.2% in the third quarter
2012.
Our portable storage business continued to make good progress during the
quarter in building its customer following, increasing booking levels and
growing rental revenues. The business achieved both its full year rental
revenue and profitability goals for 2012. Turning the corner into 2013, our
portable storage business has strong momentum and we are excited about its
long-term prospects in becoming a meaningfully sized business and a material
contributor to McGrath RentCorp’s earnings.
In 2012, we added a net $74 million in original cost of rental assets. These
rental products were primarily for the growth of Adler Tank Rentals, and for
our test equipment and portable storage businesses. During the year we also
paid out $23 million in shareholder dividends. Finally, we invested $14
million in property, plant and equipment expenditures, primarily for the
growth of Adler Tank Rentals; yet, our year ending notes payable only rose by
approximately $5 million, and we carried a 1.91 to 1 ratio of funded debt
(notes payable) to last twelve months actual adjusted EBITDA . Strong cash
flows and a low-leveraged balance sheet matter greatly towards the financial
strength, opportunity nimbleness, and overall shareholder returns of McGrath
RentCorp.”
All comparisons presented below are for the quarter ended December 31, 2012 to
the quarter ended December 31, 2011 unless otherwise indicated.
MOBILE MODULAR
For the fourth quarter of 2012, the Company’s Mobile Modular division reported
an 8% decrease in income from operations to $5.6 million. Rental revenues
decreased 1% to $20.1 million and other direct costs increased 16% to $5.4
million, which resulted in a decrease in gross profit on rental revenues of 8%
to $11.2 million. Sales revenues increased 12% to $4.1 million, with gross
profit on sales revenues increasing 13% to $1.0 million, primarily due to
higher new and used equipment sales revenues in the fourth quarter of 2012.
Selling and administrative expenses increased 8% to $8.7 million primarily as
a result of higher bad debt expense and higher salary and benefit costs,
primarily related to the expansion of our Portable Storage growth initiative.
TRS-RENTELCO
For the fourth quarter of 2012, the Company’s TRS-RenTelco division reported
an 18% increase in income from operations to $10.1 million. Rental revenues
increased 6% to $26.8 million. The increase in rental revenues together with a
3% decrease in other direct costs to $3.3 million, partly offset by a 4%
increase in depreciation expense to $9.9 million, resulted in an increase in
gross profit on rental revenues of 10% to $13.7 million. Sales revenues
increased 42% to $10.1 million with gross profit on sales flat at $2.8
million, due to lower margins on used equipment sales revenues in the fourth
quarter of 2012, which included $3.7 million in proceeds from the sale of the
TRS-Environmental product line at a loss of $0.4 million. Selling and
administrative expenses decreased 3% to $6.8 million, primarily due to
decreased salary and benefit costs.
ADLER TANKS
For the fourth quarter of 2012, the Company’s Adler Tanks division reported a
39% decrease in income from operations to $5.9 million. Rental revenues
increased 6% to $18.2 million and other direct costs more than doubled to $3.0
million, which resulted in a decrease in gross profit on rental revenues of
11% to $11.9 million. Rental related services revenues increased $1.2 million
to $5.0 million, with gross profit on rental related services revenues
decreasing $0.6 million to $0.6 million. Selling and administrative expenses
increased 35% to $6.8 million, primarily due to higher bad debt expenses and
higher personnel and benefit costs.
OTHER HIGHLIGHTS
* Debt decreased $12.2 million during the quarter to $302.0 million, with
the Company’s funded debt (notes payable) to equity ratio decreasing from
0.88 to 1 at September 30, 2012 to 0.83 to 1 at December 31, 2012. As of
December 31, 2012, the Company had capacity to borrow an additional $228.0
million under its lines of credit.
* Dividend rate increased 2% to $0.235 per share for the fourth quarter 2012
compared to the fourth quarter 2011. On an annualized basis, this dividend
represents a 3.2% yield on the February 20, 2013 close price of $29.23.
* Adjusted EBITDA decreased 4% to $40.6 million for the fourth quarter of
2012. At December 31, 2012, the Company’s ratio of funded debt to the last
twelve months actual Adjusted EBITDA was 1.91 to 1 compared to 1.96 to 1
at September 30, 2012. Adjusted EBITDA is defined as net income before
interest expense, provision for income taxes, depreciation, amortization
and non-cash stock-based compensation. A reconciliation of net income to
Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating
activities can be found at the end of this release.
You should read this press release in conjunction with the financial
statements and notes thereto included in the Company’s latest Forms 10-K and
10-Q and other SEC filings. You can visit the Company’s web site at
www.mgrc.com to access information on McGrath RentCorp, including the latest
Forms 10-K and 10-Q and other SEC filings.
FINANCIAL GUIDANCE
The Company expects 2013 full-year earnings per share to be in a range of
$1.85 to $1.95 per diluted share.
For the full-year 2013, the Company expects 4% to 7% growth in rental
operations revenues over 2012. Sales revenue is expected to be approximately
10% lower than 2012, but gross profit from sales is expected to be comparable
to 2012. Rental equipment depreciation expense is expected to increase to
between $67 and $69 million, driven by rental fleet growth. Selling and
administrative costs are expected to increase to between $89 and $91 million
to support business growth, and continued investment in Adler Tanks and our
portable storage initiative. Full year interest expense is expected to be
approximately $9 million. The Company expects the 2013 effective tax rate to
be 39.2% and the diluted share count to increase to between 25.3 and 25.7
million shares. These forward-looking statements reflect McGrath RentCorp’s
expectations as of February 21, 2013. Actual 2013 full-year earnings per share
results may be materially different and affected by many factors, including
those factors outlined in the “forward-looking statements” paragraph at the
end of this press release.
ABOUT MCGRATH RENTCORP
Founded in 1979, McGrath RentCorp is a diversified business-to-business rental
company. The Company’s Mobile Modular division rents and sells modular
buildings to fulfill customers’ temporary and permanent classroom and office
space needs in California, Texas, Florida, and the Mid-Atlantic from
Washington D.C. to Georgia. The Company’s TRS-RenTelco division rents and
sells electronic test equipment and is one of the leading rental providers of
general purpose and communications test equipment in the Americas. The
Company’s New Jersey based Adler Tank Rentals subsidiary rents and sells
containment solutions for hazardous and nonhazardous liquids and solids with
operations today serving key markets throughout the United States. In 2008,
the Company entered the portable storage container rental business in
California under the trade name Mobile Modular Portable Storage, and in 2009
expanded this business into Texas and Florida. For more information on McGrath
RentCorp and its operating units, please visit our websites:
Corporate – www.mgrc.com
Tanks and Boxes – www.AdlerTankRentals.com
Modular Buildings – www.MobileModularRents.com
Portable Storage – www.MobileModularRents-PortableStorage.com
Electronic Test Equipment – www.TRS-RenTelco.com
School Facilities Manufacturing – www.Enviroplex.com
CONFERENCE CALL NOTE
As previously announced in its press release of January 24, 2013, McGrath
RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m.
Pacific Time) on February 21, 2013 to discuss the fourth quarter 2012 results.
To participate in the teleconference, dial 1-877-941-1427 (in the U.S.), or
1-480-629-9664 (outside the US), or visit the investor relations section of
the Company’s website at www.mgrc.com. Telephone replay of the call will be
available for 7 days following the call by dialing 1-800-406-7325 (in the
U.S.), or 1-303-590-3030 (outside the U.S.). The pass code for the call replay
is 4584516.
FORWARD-LOOKING STATEMENTS
Statements in this press release which are not historical facts are
forward-looking statements within the meaning of Section 21E of the Securities
Exchange Act of 1934. All statements, other than statements of historical
facts, regarding McGrath RentCorp’s business strategy, future operations,
financial position, estimated revenues or losses, projected costs, prospects,
plans and objectives are forward looking statements. These forward-looking
statements appear in a number of places and can be identified by the use of
forward-looking terminology such as “may,” “will,” “should,” “expect,” “plan,”
“anticipate,” “believe,” “estimate,” “predict,” “future,” “intend,” “hopes,”
“goals” or “certain” or the negative of these terms or other variations or
comparable terminology. In particular, the statements made in this press
release about the following topics are forward looking statements: higher
rental revenues and earnings levels from Adler in the years ahead; lower
expenses in 2013 attributable to moving underutilized equipment at Adler;
positive indicators in the modular division, such as the successful California
personal income and sales tax ballot initiatives, lower unemployment in
California, scarce inventory of existing homes, and increases in construction;
strong momentum and future growth in our portable storage business, and the
statements under the heading “Financial Guidance.”
Management cautions that forward-looking statements are not guarantees of
future performance and are subject to risks and uncertainties that could cause
our actual results to differ materially from those projected in such
forward-looking statements including, without limitation, the following: the
continuation of the current recession and financial, budget and credit crises,
particularly in California, including the impact on funding for school
facility projects and residential and commercial construction sectors, our
customers’ need and ability to rent our products, and the Company’s ability to
access additional capital in the current uncertain capital and credit market;
changes in state funding for education and the timing and impact of federal
stimulus monies; the effectiveness of management’s strategies and decisions,
general economic, stock market and business conditions, including in the
states and countries where we sell or rent our products; continuing demand for
our products; hiring, retention and motivation of key personnel; failure by
third parties to manufacture and deliver our products in a timely manner and
to our specifications; the cost of and our ability to successfully implement
information system upgrades; our ability to finance expansion and to locate
and consummate acquisitions and to successfully integrate and operate Adler
Tanks and other acquisitions; fluctuations in interest rates and the Company’s
ability to manage credit risk; our ability to effectively manage our rental
assets; the risk that we may be subject to litigation under environmental,
health and safety and product liability laws and claims from employees,
vendors and other third parties; fluctuations in the Company’s effective tax
rate; changes in financial accounting standards; our failure to comply with
internal control requirements; catastrophic loss to our facilities; effect on
the Company’s Adler Tanks business from reductions to the price of oil or gas;
new or modified statutory or regulatory requirements; success of the Company’s
strategic growth initiatives; risks associated with doing business with
government entities; seasonality of our businesses; intense industry
competition including increasing price pressure; our ability to timely
deliver, install and redeploy our rental products; significant increases in
raw materials, labor, and other costs; and risks associated with operating
internationally, including unfavorable exchange rates for the U.S. dollar
against our Canadian dollar denominated revenues.
Our future business, financial condition and results of operations could
differ materially from those anticipated by such forward-looking statements
and are subject to risks and uncertainties including the risks set forth
above, those discussed in Part II—Item 1A “Risk Factors” and elsewhere in our
Form 10-K for the year ended December 31, 2012, which is expected to be filed
with the SEC on February 22, 2013, and those that may be identified from time
to time in our reports and registration statements filed with the SEC.
Forward-looking statements are made only as of the date of this press release
and are based on management’s reasonable assumptions; however, these
assumptions can be wrong or affected by known or unknown risks and
uncertainties. Readers should not place undue reliance on these
forward-looking statements and are cautioned that any such forward-looking
statements are not guarantees of future performance. Except as otherwise
required by law, we do not undertake any duty to update any of the
forward-looking statements after the date of this press release to conform
such statements to actual results or to changes in our expectations.
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31, December 31,
(in thousands, except per share 2012 2011 2012 2011
amounts)
REVENUES
Rental $ 65,117 $ 62,798 $ 248,444 $ 234,906
Rental Related Services 12,217 10,870 46,920 39,486
Rental Operations 77,334 73,668 295,364 274,392
Sales 24,126 11,176 66,444 66,382
Other 490 362 2,266 1,896
Total Revenues 101,950 85,206 364,074 342,670
COSTS AND EXPENSES
Direct Costs of Rental
Operations
Depreciation of Rental 16,583 15,393 63,819 60,187
Equipment
Rental Related Services 9,391 8,491 37,207 30,692
Other 11,725 9,380 45,581 39,859
Total Direct Costs of Rental 37,699 33,264 146,607 130,738
Operations
Costs of Sales 20,212 7,749 49,173 45,141
Total Costs of Revenues 57,911 41,013 195,780 175,879
Gross Profit 44,039 44,193 168,294 166,791
Selling and Administrative 22,906 20,843 86,278 78,127
Expenses
Income from Operations 21,133 23,350 82,016 88,664
Interest Expense 2,282 2,119 9,149 7,606
Income Before Provision for 18,851 21,231 72,867 81,058
Income Taxes
Provision for Income Taxes 6,915 8,004 28,090 31,456
Net Income $ 11,936 $ 13,227 $ 44,777 $ 49,602
Earnings Per Share:
Basic $ 0.48 $ 0.54 $ 1.80 $ 2.04
Diluted $ 0.47 $ 0.53 $ 1.78 $ 2.00
Shares Used in Per Share
Calculation:
Basic 24,847 24,431 24,759 24,349
Diluted 25,216 24,892 25,157 24,760
Cash Dividends Declared Per $ 0.235 $ 0.230 $ 0.940 $ 0.920
Share
MCGRATH RENTCORP
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, December 31,
(in thousands) 2012 2011
ASSETS
Cash $ 1,612 $ 1,229
Accounts Receivable, net of allowance for
doubtful accounts of $3,000 in 2012 and $1,500 92,256 92,671
in 2011
Rental Equipment, at cost:
Relocatable Modular Buildings 551,101 539,147
Electronic Test Equipment 266,934 258,586
Liquid and Solid Containment Tanks and Boxes 254,810 201,456
1,072,845 999,189
Less Accumulated Depreciation (353,992 ) (326,043 )
Rental Equipment, net 718,853 673,146
Property, Plant and Equipment, net 101,031 94,702
Prepaid Expenses and Other Assets 19,507 17,170
Intangible Assets, net 11,487 12,311
Goodwill 27,700 27,700
Total Assets $ 972,446 $ 918,929
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Notes Payable $ 302,000 $ 296,500
Accounts Payable and Accrued Liabilities 52,220 58,854
Deferred Income 26,924 25,067
Deferred Income Taxes, net 226,564 205,366
Total Liabilities 607,708 585,787
Shareholders’ Equity:
Common Stock, no par value -
Authorized - 40,000 shares
Issued and Outstanding - 24,931 shares as of
December 31, 2012 and 24,576 shares as of 85,342 74,878
December 31, 2011
Retained Earnings 279,396 258,264
Total Shareholders’ Equity 364,738 333,142
Total Liabilities and Shareholders’ Equity $ 972,446 $ 918,929
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Year Ended December 31,
(in thousands) 2012 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 44,777 $ 49,602
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation and Amortization 72,476 67,395
Provision for Doubtful Accounts 4,263 1,755
Non-Cash Stock-Based Compensation 3,840 5,221
Gain on Sale of Used Rental Equipment (12,389 ) (12,444 )
Change In:
Accounts Receivable (3,848 ) (17,938 )
Income Taxes Receivable — 6,131
Prepaid Expenses and Other Assets (2,337 ) (3,226 )
Accounts Payable and Accrued Liabilities (3,456 ) 5,715
Deferred Income 1,857 1,277
Deferred Income Taxes 21,198 25,823
Net Cash Provided by Operating Activities 126,381 129,311
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Rental Equipment (131,805 ) (154,963 )
Purchase of Property, Plant and Equipment (14,161 ) (17,204 )
Proceeds from Sale of Used Rental Equipment 30,970 28,453
Net Cash Used in Investing Activities (114,996 ) (143,714 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Borrowings (Repayments) Under Bank Lines of 5,500 (57,140 )
Credit
Borrowings Under Private Placement — 100,000
Principal Payments on Senior Notes — (12,000 )
Proceeds from the Exercise of Stock Options 5,591 5,054
Excess Tax Benefit from Exercise and 1,033 980
Disqualifying Disposition of Stock Options
Payment of Dividends (23,126 ) (22,252 )
Net Cash Provided by (Used in) Financing (11,002 ) 14,642
Activities
Net Increase in Cash 383 239
Cash Balance, beginning of period 1,229 990
Cash Balance, end of period $ 1,612 $ 1,229
Interest Paid, during the period $ 9,107 $ 6,877
Net Income Taxes Paid (Refunds Received), during $ 5,842 $ (1,480 )
the period
Dividends Accrued During the period, not yet $ 6,194 $ 5,952
paid
Rental Equipment Acquisitions, not yet paid $ 4,491 $ 8,186
MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three Months Ended December 31, 2012
Mobile
(dollar Modular TRS-RenTelco Adler Tanks Enviroplex Consolidated
amounts in
thousands)
Revenues
Rental $ 20,104 $ 26,849 $ 18,164 $ — $ 65,117
Rental Related 6,348 842 5,027 — 12,217
Services
Rental 26,452 27,691 23,191 — 77,334
Operations
Sales 4,077 10,100 32 9,917 24,126
Other 103 354 33 — 490
Total Revenues 30,632 38,145 23,256 9,917 101,950
Costs and
Expenses
Direct Costs
of Rental
Operations:
Depreciation
of Rental 3,505 9,894 3,184 — 16,583
Equipment
Rental Related 4,246 758 4,387 — 9,391
Services
Other 5,409 3,274 3,042 — 11,725
Total Direct
Costs of 13,160 13,926 10,613 — 37,699
Rental
Operations
Costs of Sales 3,109 7,338 38 9,727 20,212
Total Costs of 16,269 21,264 10,651 9,727 57,911
Revenue
Gross Profit
(Loss)
Rental 11,190 13,681 11,938 — 36,809
Rental Related 2,102 84 640 — 2,826
Services
Rental 13,292 13,765 12,578 — 39,635
Operations
Sales 968 2,762 (6 ) 190 3,914
Other 103 354 33 — 490
Total Gross 14,363 16,881 12,605 190 44,039
Profit
Selling and
Administrative 8,715 6,753 6,754 684 22,906
Expenses
Income (Loss)
from $ 5,648 $ 10,128 $ 5,851 $ (494 ) 21,133
Operations
Interest 2,282
Expense
Provision for 6,915
Income taxes
Net Income $ 11,936
Other
Information
Average Rental $ 532,282 $ 270,505 $ 244,160
Equipment ^1
Average
Monthly Total 1.26 % 3.31 % 2.48 %
Yield ^2
Average 66.8 % 65.4 % 69.9 %
Utilization ^3
Average
Monthly Rental 1.88 % 5.06 % 3.54 %
Rate ^4
Average Rental Equipment represents the cost of rental equipment excluding
1 accessory equipment. For Mobile Modular and Adler Tanks, Average Rental
Equipment also excludes new equipment inventory.
2 Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the cost of rental equipment for the period.
3 Average Utilization is calculated by dividing the cost of Average Rental
Equipment on rent by the total cost of Average Rental Equipment.
Average Monthly Rental Rate is calculated by dividing the averages of
4 monthly rental revenues by the cost of rental equipment on rent for the
period.
MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Three Months Ended December 31, 2011
Mobile
(dollar Modular TRS-RenTelco Adler Tanks Enviroplex Consolidated
amounts in
thousands)
Revenues
Rental $ 20,280 $ 25,324 $ 17,194 $ — $ 62,798
Rental Related 6,177 860 3,833 — 10,870
Services
Rental 26,457 26,184 21,027 — 73,668
Operations
Sales 3,631 7,131 41 373 11,176
Other 111 208 43 — 362
Total Revenues 30,199 33,523 21,111 373 85,206
Costs and
Expenses
Direct Costs
of Rental
Operations:
Depreciation
of Rental 3,474 9,478 2,441 — 15,393
Equipment
Rental Related 5,047 834 2,610 — 8,491
Services
Other 4,677 3,370 1,333 — 9,380
Total Direct
Costs of 13,198 13,682 6,384 — 33,264
Rental
Operations
Costs of Sales 2,778 4,333 161 477 7,749
Total Costs of 15,976 18,015 6,545 477 41,013
Revenues
Gross Profit
(Loss)
Rental 12,129 12,476 13,420 — 38,025
Rental Related 1,130 26 1,223 — 2,379
Services
Rental 13,259 12,502 14,643 — 40,404
Operations
Sales 853 2,798 (120 ) (104 ) 3,427
Other 111 208 43 — 362
Total Gross 14,223 15,508 14,566 (104 ) 44,193
Profit (Loss)
Selling and
Administrative 8,104 6,955 4,994 790 20,843
Expenses
Income from $ 6,119 $ 8,553 $ 9,572 $ (894 ) 23,350
Operations
Interest 2,119
Expense
Provision for 8,004
Income taxes
Net Income $ 13,227
Other
Information
Average Rental $ 512,757 $ 264,840 $ 184,365
Equipment ^1
Average
Monthly Total 1.32 % 3.19 % 3.11 %
Yield ^2
Average 67.1 % 67.7 % 86.8 %
Utilization ^3
Average
Monthly Rental 1.96 % 4.71 % 3.58 %
Rate ^4
Average Rental Equipment represents the cost of rental equipment excluding
1 accessory equipment. For Mobile Modular and Adler Tanks, Average Rental
Equipment also excludes new equipment inventory.
2 Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the cost of rental equipment for the period.
3 Average Utilization is calculated by dividing the cost of Average Rental
Equipment on rent by the total cost of Average Rental Equipment.
Average Monthly Rental Rate is calculated by dividing the averages of
4 monthly rental revenues by the cost of rental equipment on rent for the
period.
MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Twelve Months Ended December 31, 2012
Mobile
(dollar Modular TRS-RenTelco Adler Tanks Enviroplex Consolidated
amounts in
thousands)
Revenues
Rental $ 79,518 $ 101,645 $ 67,281 $ — $ 248,444
Rental Related 25,775 3,673 17,472 — 46,920
Services
Rental 105,293 105,318 84,753 — 295,364
Operations
Sales 14,026 26,192 2,403 23,823 66,444
Other 448 1,663 155 — 2,266
Total Revenues 119,767 133,173 87,311 23,823 364,074
Costs and
Expenses
Direct Costs
of Rental
Operations:
Depreciation
of Rental 13,942 38,174 11,703 — 63,819
Equipment
Rental Related 19,492 3,456 14,259 — 37,207
Services
Other 23,735 13,811 8,035 — 45,581
Total Direct
Costs of 57,169 55,441 33,997 — 146,607
Rental
Operations
Costs of Sales 10,576 15,649 2,157 20,791 49,173
Total Costs of 67,745 71,090 36,154 20,791 195,780
Revenue
Gross Profit
Rental 41,841 49,660 47,543 — 139,044
Rental Related 6,283 217 3,213 — 9,713
Services
Rental 48,124 49,877 50,756 — 148,757
Operations
Sales 3,450 10,543 246 3,032 17,271
Other 448 1,663 155 — 2,266
Total Gross 52,022 62,083 51,157 3,032 168,294
Profit
Selling and
Administrative 34,032 26,068 22,101 4,077 86,278
Expenses
Income (Loss)
from $ 17,990 $ 36,015 $ 29,056 $ (1,045 ) 82,016
Operations
Interest 9,149
Expense
Provision for 28,090
Income taxes
Net Income $ 44,777
Other
Information
Average Rental $ 524,084 $ 266,912 $ 223,673
Equipment ^1
Average
Monthly Total 1.26 % 3.18 % 2.51 %
Yield ^2
Average 66.4 % 65.8 % 71.5 %
Utilization ^3
Average
Monthly Rental 1.90 % 4.83 % 3.50 %
Rate ^4
Average Rental Equipment represents the cost of rental equipment excluding
1 accessory equipment. For Mobile Modular and Adler Tanks, Average Rental
Equipment also excludes new equipment inventory.
2 Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the cost of rental equipment for the period.
3 Average Utilization is calculated by dividing the cost of Average Rental
Equipment on rent by the total cost of Average Rental Equipment.
Average Monthly Rental Rate is calculated by dividing the averages of
4 monthly rental revenues by the cost of rental equipment on rent for the
period.
MCGRATH RENTCORP
BUSINESS SEGMENT DATA (unaudited)
Twelve Months Ended December 31, 2011
Mobile
(dollar Modular TRS-RenTelco Adler Tanks Enviroplex Consolidated
amounts in
thousands)
Revenues
Rental $ 79,969 $ 95,694 $ 59,243 $ — $ 234,906
Rental Related 24,063 3,133 12,290 — 39,486
Services
Rental 104,032 98,827 71,533 — 274,392
Operations
Sales 20,152 25,164 278 20,788 66,382
Other 425 1,324 147 — 1,896
Total Revenues 124,609 125,315 71,958 20,788 342,670
Costs and
Expenses
Direct Costs
of Rental
Operations:
Depreciation
of Rental 13,780 38,039 8,368 — 60,187
Equipment
Rental Related 18,835 2,848 9,009 — 30,692
Services
Other 21,940 13,272 4,647 — 39,859
Total Direct
Costs of 54,555 54,159 22,024 — 130,738
Rental
Operations
Costs of Sales 14,861 14,087 315 15,878 45,141
Total Costs of 69,416 68,246 22,339 15,878 175,879
Revenue
Gross Profit
Rental 44,249 44,383 46,228 — 134,860
Rental Related 5,228 285 3,281 — 8,794
Services
Rental 49,477 44,668 49,509 — 143,654
Operations
Sales 5,291 11,077 (37 ) 4,910 21,241
Other 425 1,324 147 — 1,896
Total Gross 55,193 57,069 49,619 4,910 166,791
Profit
Selling and
Administrative 32,131 25,921 16,698 3,377 78,127
Expenses
Income from $ 23,062 $ 31,148 $ 32,921 $ 1,533 88,664
Operations
Interest 7,606
Expense
Provision for 31,456
Income taxes
Net Income $ 49,602
Other
Information
Average Rental $ 504,276 $ 258,995 $ 157,917
Equipment ^1
Average
Monthly Total 1.32 % 3.08 % 3.13 %
Yield ^2
Average 67.1 % 66.0 % 86.2 %
Utilization ^3
Average
Monthly Rental 1.97 % 4.66 % 3.63 %
Rate ^4
Average Rental Equipment represents the cost of rental equipment excluding
1 accessory equipment. For Mobile Modular and Adler Tanks, Average Rental
Equipment also excludes new equipment inventory.
2 Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the cost of rental equipment for the period.
3 Average Utilization is calculated by dividing the cost of Average Rental
Equipment on rent by the total cost of Average Rental Equipment.
Average Monthly Rental Rate is calculated by dividing the averages of
4 monthly rental revenues by the cost of rental equipment on rent for the
period.
Reconciliation of Adjusted EBITDA to the most directly comparable GAAP
measures
To supplement the Company’s financial data presented on a basis consistent
with accounting principles generally accepted in the United States of America
(“GAAP”), the Company presents Adjusted EBITDA which is defined by the Company
as net income before interest expense, provision for income taxes,
depreciation, amortization, and non-cash stock-based compensation. The Company
presents Adjusted EBITDA as a financial measure as management believes it
provides useful information to investors regarding the Company’s liquidity and
financial condition and because management, as well as the Company’s lenders,
use this measure in evaluating the performance of the Company.
Management uses Adjusted EBITDA as a supplement to GAAP measures to further
evaluate the Company’s period-to-period operating performance, compliance with
financial covenants in the Company’s revolving lines of credit and senior
notes as well as the Company’s ability to meet future capital expenditure and
working capital requirements. Management believes the exclusion of non-cash
charges, including stock-based compensation, is useful in measuring the
Company’s cash available for operations and performance of the Company.
Because management finds Adjusted EBITDA useful, the Company believes its
investors will also find Adjusted EBITDA useful in evaluating the Company’s
performance.
Adjusted EBITDA should not be considered in isolation or as a substitute for
net income, cash flows, or other consolidated income or cash flow data
prepared in accordance with GAAP or as a measure of the Company’s
profitability or liquidity. Adjusted EBITDA is not in accordance with or an
alternative for GAAP, and may be different from non−GAAP measures used by
other companies. Unlike EBITDA, which may be used by other companies or
investors, Adjusted EBITDA does not include stock-based compensation charges.
The Company believes that Adjusted EBITDA is of limited use in that it does
not reflect all of the amounts associated with the Company’s results of
operations as determined in accordance with GAAP and does not accurately
reflect real cash flow. In addition, other companies may not use Adjusted
EBITDA or may use other non-GAAP measures, limiting the usefulness of Adjusted
EBITDA for purposes of comparison. The Company’s presentation of Adjusted
EBITDA should not be construed as an inference that the Company will not incur
expenses that are the same as or similar to the adjustments in this
presentation. Therefore, Adjusted EBITDA should only be used to evaluate the
Company’s results of operations in conjunction with the corresponding GAAP
measures. The Company compensates for the limitations of Adjusted EBITDA by
relying upon GAAP results to gain a complete picture of the Company’s
performance. Because Adjusted EBITDA is a non-GAAP financial measure as
defined by the Securities and Exchange Commission, the Company includes in the
tables below reconciliations of Adjusted EBITDA to the most directly
comparable financial measures calculated and presented in accordance with
GAAP.
Reconciliation of Net Income to Adjusted EBITDA
(dollar amounts in Three Months Ended Twelve Months Ended
thousands)
December 31, December 31,
2012 2011 2012 2011
Net Income $ 11,936 $ 13,227 $ 44,777 $ 49,602
Provision for Income 6,915 8,004 28,090 31,456
Taxes
Interest 2,282 2,119 9,149 7,606
Income from Operations 21,133 23,350 82,016 88,664
Depreciation and 18,811 17,649 72,476 67,395
Amortization
Non-Cash Stock-Based 686 1,512 3,840 5,221
Compensation
Adjusted EBITDA ^1 $ 40,638 $ 42,511 $ 158,332 $ 161,280
Adjusted EBITDA Margin 40 % 50 % 43 % 47 %
^2
Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities
(dollar amounts in Three Months Ended Twelve Months Ended
thousands)
December 31, December 31,
2012 2011 2012 2011
Adjusted EBITDA ^1 $ 40,630 $ 42,511 $ 158,332 $ 161,280
Interest Paid (3,253 ) (3,171 ) (9,107 ) (6,877 )
Net Income Taxes (1,209 ) (1,216 ) (5,842 ) 1,480
(Paid) Refund Received
Gain on Sale of Rental (3,008 ) (2,731 ) (12,389 ) (12,444 )
Equipment
Change in certain
assets and
liabilities:
Accounts Receivable, 7,962 (3,030 ) (415 ) (16,183 )
net
Prepaid Expenses and 8,392 (3,117 ) (2,337 ) (3,226 )
Other Assets
Accounts Payable and (5,422 ) (4,067 ) (3,717 ) 4,004
Other Liabilities
Deferred Income (8,718 ) (364 ) 1,857 1,277
Net Cash Provided by $ 35,374 $ 24,815 $ 126,382 $ 129,311
Operating Activities
Adjusted EBITDA is defined as net income before interest expense, provision
1 for income taxes, depreciation, amortization, and non-cash stock-based
compensation.
2 Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total
revenues for the period.
Contact:
McGrath RentCorp
Keith E. Pratt, 925-606-9200
Chief Financial Officer
Sponsored Links
Advertisement
Advertisements
Sponsored Links
Advertisement
Rate this Page