McGrath RentCorp Announces Results for Fourth Quarter 2011
Rental revenues increase 14%
EPS up 2% to
Company announces 2% dividend increase
Total revenues for the year ended
The Company also announced that the board of directors declared a
quarterly cash dividend of
Dennis Kakures, President and CEO of
“Our Company-wide 14% increase in rental revenues for the quarter from a year ago reflects very favorable business activity and rental revenue increases in both our tank and electronics rental businesses.
Our tank and box division rental revenues increased 46% to
Our electronics division rental revenues for the quarter increased by
Modular division rental revenues for the fourth quarter decreased by
Our portable storage and environmental test equipment businesses both continued to make good progress in their market penetration, booking levels, and rental revenue growth during the quarter. We continue to work hard to grow both of these initiatives.
During 2011, we had a net addition of over
All comparisons presented below are for the quarter ended
MOBILE MODULAR
For the fourth quarter of 2011, the Company’s Mobile Modular division
reported a 30% decrease in income from operations to
TRS-RENTELCO
For the fourth quarter of 2011, the Company’s TRS-RenTelco division
reported an 18% increase in income from operations to
For the fourth quarter of 2011, the Company’s
OTHER FOURTH QUARTER HIGHLIGHTS
-
Debt increased
$6.9 million during the quarter to$296.5 million , with the Company’s funded debt (notes payable) to equity ratio decreasing from 0.90 to 1 atSeptember 30, 2011 to 0.89 to 1 atDecember 31, 2011 . As ofDecember 31, 2011 , the Company had capacity to borrow an additional$158.5 million under its lines of credit. -
Dividend rate increased 2% to
$0.23 per share for the fourth quarter 2011 compared to the fourth quarter 2010. On an annualized basis, this dividend represents a 2.8% yield on theFebruary 28, 2012 close price of$32.37 . -
Adjusted EBITDA increased 8% to
$42.5 million for the fourth quarter of 2011. AtDecember 31, 2011 , the Company’s ratio of funded debt to the last twelve months actual Adjusted EBITDA was 1.84 to 1 compared to 2.01 to 1 atDecember 31, 2010 . Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization and other 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
FINANCIAL GUIDANCE
The Company expects 2012 full-year earnings per share to be in a range
of
In 2012, the Company expects approximately 8% to 10% growth in rental
operations revenues over 2011 and sales revenues comparable to 2011. The
Company expects strongest revenue growth in
ABOUT
Founded in 1979,
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
Environmental
Test Equipment – www.TRS-Environmental.com
School
Facilities Manufacturing – www.Enviroplex.com
CONFERENCE CALL NOTE
As previously announced in its press release of
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:
fiscal and budgetary challenges in
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
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 our Form 10-K for the year
ended
MCGRATH RENTCORP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) |
|||||||||||
Three Months Ended |
Twelve Months Ended |
||||||||||
(in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | |||||||
REVENUES | |||||||||||
Rental | $ | 62,798 | $ | 54,957 | $ | 234,906 | $ | 200,615 | |||
Rental Related Services | 10,870 | 8,984 | 39,486 | 34,702 | |||||||
Rental Operations | 73,668 | 63,941 | 274,392 | 235,317 | |||||||
Sales | 11,176 | 15,520 | 66,382 | 54,055 | |||||||
Other | 362 | 482 | 1,896 | 2,028 | |||||||
Total Revenues | 85,206 | 79,943 | 342,670 | 291,400 | |||||||
COSTS AND EXPENSES | |||||||||||
Direct Costs of Rental Operations | |||||||||||
Depreciation of Rental Equipment | 15,393 | 14,734 | 60,187 | 56,399 | |||||||
Rental Related Services | 8,491 | 6,821 | 30,692 | 26,542 | |||||||
Other | 9,380 | 9,161 | 39,859 | 40,007 | |||||||
Total Direct Costs of Rental Operations | 33,264 | 30,716 | 130,738 | 122,948 | |||||||
Costs of Sales | 7,749 | 10,772 | 45,141 | 37,637 | |||||||
Total Costs of Revenues | 41,013 | 41,488 | 175,879 | 160,585 | |||||||
Gross Profit | 44,193 | 38,455 | 166,791 | 130,815 | |||||||
Selling and Administrative Expenses | 20,843 | 16,650 | 78,127 | 65,579 | |||||||
Income from Operations | 23,350 | 21,805 | 88,664 | 65,236 | |||||||
Interest Expense | 2,119 | 1,539 | 7,606 | 6,186 | |||||||
Income Before Provision for Income Taxes | 21,231 | 20,266 | 81,058 | 59,050 | |||||||
Provision for Income Taxes | 8,004 | 7,523 | 31,456 | 22,571 | |||||||
Net Income | $ | 13,227 | $ | 12,743 | $ | 49,602 | $ | 36,479 | |||
Earnings Per Share: | |||||||||||
Basic | $ | 0.54 | $ | 0.53 | $ | 2.04 | $ | 1.52 | |||
Diluted | $ | 0.53 | $ | 0.52 | $ | 2.00 | $ | 1.50 | |||
Shares Used in Per Share Calculation: | |||||||||||
Basic | 24,431 | 24,085 | 24,349 | 23,944 | |||||||
Diluted | 24,892 | 24,500 | 24,760 | 24,289 | |||||||
Cash Dividends Declared Per Share | $ | 0.230 | $ | 0.225 | $ | 0.920 | $ | 0.900 |
MCGRATH RENTCORP | |||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
|||||||
December 31, | December 31, | ||||||
(in thousands) | 2011 | 2010 | |||||
ASSETS | |||||||
Cash | $ | 1,229 | $ | 990 | |||
Accounts Receivable, net of allowance for doubtful | |||||||
accounts of $1,500 in 2011 and $1,700 in 2010 | 92,671 | 76,488 | |||||
Income Taxes Receivable | — | 6,131 | |||||
Rental Equipment, at cost: | |||||||
Relocatable Modular Buildings | 539,147 | 514,548 | |||||
Electronic Test Equipment | 258,586 | 250,125 | |||||
Liquid and Solid Containment Tanks and Boxes | 201,456 | 133,095 | |||||
999,189 | 897,768 | ||||||
Less Accumulated Depreciation | (326,043 | ) | (306,188 | ) | |||
Rental Equipment, net | 673,146 | 591,580 | |||||
Property, Plant and Equipment, net | 94,702 | 83,861 | |||||
Prepaid Expenses and Other Assets | 17,170 | 13,944 | |||||
Intangible Assets, net | 12,311 | 12,868 | |||||
Goodwill | 27,700 | 27,700 | |||||
Total Assets | $ | 918,929 | $ | 813,562 | |||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Liabilities: | |||||||
Notes Payable | $ | 296,500 | $ | 265,640 | |||
Accounts Payable and Accrued Liabilities | 58,854 | 49,612 | |||||
Deferred Income | 25,067 | 23,790 | |||||
Deferred Income Taxes, net | 205,366 | 179,543 | |||||
Total Liabilities | 585,787 | 518,585 | |||||
Shareholders’ Equity: | |||||||
Common Stock, no par value - | |||||||
Authorized -- 40,000 shares | |||||||
Issued and Outstanding -- 24,576 shares in 2011 and | |||||||
24,235 shares in 2010 | 74,878 | 63,623 | |||||
Retained Earnings | 258,264 | 231,354 | |||||
Total Shareholders’ Equity | 333,142 | 294,977 | |||||
Total Liabilities and Shareholders’ Equity | $ | 918,929 | $ | 813,562 |
MCGRATH RENTCORP | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) |
|||||||
Year Ended December 31, | |||||||
(in thousands) | 2011 | 2010 | |||||
CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||
Net Income | $ | 49,602 | $ | 36,479 | |||
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities: |
|||||||
Depreciation and Amortization | 67,395 | 62,577 | |||||
Provision for Doubtful Accounts | 1,755 | 1,494 | |||||
Non-Cash Stock-Based Compensation | 5,221 | 4,227 | |||||
Gain on Sale of Used Rental Equipment | (12,444 | ) | (11,728 | ) | |||
Change In: | |||||||
Accounts Receivable | (17,938 | ) | (7,385 | ) | |||
Income Taxes Receivable | 6,131 | 120 | |||||
Prepaid Expenses and Other Assets | (3,226 | ) | 296 | ||||
Accounts Payable and Accrued Liabilities | 5,715 | 3,399 | |||||
Deferred Income | 1,277 | (954 | ) | ||||
Deferred Income Taxes | 25,823 | 12,073 | |||||
Net Cash Provided by Operating Activities | 129,311 | 100,598 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||
Payments related to Acquisition of Adler Tanks | — | (39 | ) | ||||
Purchase of Rental Equipment | (154,963 | ) | (122,749 | ) | |||
Purchase of Property, Plant and Equipment | (17,204 | ) | (12,144 | ) | |||
Proceeds from Sale of Used Rental Equipment | 28,453 | 28,694 | |||||
Net Cash Used in Investing Activities | (143,714 | ) | (106,238 | ) | |||
CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||
Net Borrowings (Payments) Under Bank Lines of Credit | (57,140 | ) | 30,306 | ||||
Borrowings Under Private Placement | 100,000 | — | |||||
Principal Payments on Senior Notes | (12,000 | ) | (12,000 | ) | |||
Proceeds from the Exercise of Stock Options | 5,054 | 7,506 | |||||
Excess Tax Benefit from Equity Awards | 980 | 1,021 | |||||
Payment of Dividends | (22,252 | ) | (21,390 | ) | |||
Net Cash Provided by Financing Activities | 14,642 | 5,443 | |||||
Net Increase (Decrease) in Cash | 239 | (197 | ) | ||||
Cash Balance, beginning of period | 990 | 1,187 | |||||
Cash Balance, end of period | $ | 1,229 | $ | 990 | |||
Interest Paid, during the period | $ | 6,877 | $ | 6,306 | |||
Net Income Taxes Paid (Refunds Received), during the period | $ | (1,480 | ) | $ | 9,342 | ||
Dividends Accrued | $ | 5,952 | $ | 5,513 | |||
Rental Equipment Acquisitions, not yet paid | $ | 8,186 | $ | 5,388 |
MCGRATH RENTCORP BUSINESS SEGMENT DATA (unaudited) Three Months Ended December 31, 2011 |
||||||||||||||||||
(dollar amounts in thousands) |
Mobile |
TRS- |
Adler |
Enviroplex |
Consolidated |
|||||||||||||
Revenues | ||||||||||||||||||
Rental | $ | 20,280 | $ | 25,324 | $ | 17,194 | $ | — | $ | 62,798 | ||||||||
Rental Related Services | 6,177 | 860 | 3,833 | — | 10,870 | |||||||||||||
Rental Operations | 26,457 | 26,184 | 21,027 | — | 73,668 | |||||||||||||
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 Equipment | 3,474 | 9,478 | 2,441 | — | 15,393 | |||||||||||||
Rental Related Services | 5,047 | 834 | 2,610 | — | 8,491 | |||||||||||||
Other | 4,677 | 3,370 | 1,333 | — | 9,380 | |||||||||||||
Total Direct Costs of Rental Operations | 13,198 | 13,682 | 6,384 | — | 33,264 | |||||||||||||
Costs of Sales | 2,778 | 4,333 | 161 | 477 | 7,749 | |||||||||||||
Total Costs of Revenues | 15,976 | 18,015 | 6,545 | 477 | 41,013 | |||||||||||||
Gross Profit (Loss) | ||||||||||||||||||
Rental | 12,129 | 12,476 | 13,420 | — | 38,025 | |||||||||||||
Rental Related Services | 1,130 | 26 | 1,223 | — | 2,379 | |||||||||||||
Rental Operations | 13,259 | 12,502 | 14,643 | — | 40,404 | |||||||||||||
Sales | 853 | 2,798 | (120 | ) | (104 | ) | 3,427 | |||||||||||
Other | 111 | 208 | 43 | — | 362 | |||||||||||||
Total Gross Profit | 14,223 | 15,508 | 14,566 | (104 | ) | 44,193 | ||||||||||||
Selling and Administrative Expenses | 8,104 | 6,955 | 4,994 | 790 | 20,843 | |||||||||||||
Income (Loss) from Operations | $ | 6,119 | $ | 8,553 | $ | 9,572 | $ | (894 | ) | 23,350 | ||||||||
Interest Expense | 2,119 | |||||||||||||||||
Provision for Income taxes | 8,004 | |||||||||||||||||
Net Income | $ | 13,227 | ||||||||||||||||
Other Information | ||||||||||||||||||
Average Rental Equipment 1 | $ | 512,757 | $ | 264,840 | $ | 184,365 | ||||||||||||
Average Monthly Total Yield 2 | 1.32 | % | 3.19 | % | 3.11 | % | ||||||||||||
Average Utilization 3 | 67.1 | % | 67.7 | % | 86.8 | % | ||||||||||||
Average Monthly Rental Rate 4 | 1.96 | % | 4.71 | % | 3.58 | % |
-
Average Rental Equipment represents the cost of rental equipment
excluding accessory equipment.
For Mobile Modular andAdler Tanks , Average Rental Equipment also excludes new equipment inventory. -
Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by
the cost of rental equipment, for the period. -
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
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, 2010 |
|||||||||||||||||
(dollar amounts in thousands) |
Mobile |
TRS- |
Adler |
Enviroplex |
Consolidated |
||||||||||||
Revenues | |||||||||||||||||
Rental | $ | 20,759 | $ | 22,457 | $ | 11,741 | $ | — | $ | 54,957 | |||||||
Rental Related Services | 5,741 | 618 | 2,625 | — | 8,984 | ||||||||||||
Rental Operations | 26,500 | 23,075 | 14,366 | — | 63,941 | ||||||||||||
Sales | 5,543 | 6,997 | 150 | 2,830 | 15,520 | ||||||||||||
Other | 87 | 378 | 17 | — | 480 | ||||||||||||
Total Revenues | 32,130 | 30,450 | 14,533 | 2,830 | 79,943 | ||||||||||||
Costs and Expenses | |||||||||||||||||
Direct Costs of Rental Operations: | |||||||||||||||||
Depreciation of Rental Equipment | 3,443 | 9,490 | 1,801 | — | 14,734 | ||||||||||||
Rental Related Services | 4,256 | 547 | 2,018 | — | 6,821 | ||||||||||||
Other | 4,584 | 3,250 | 1,327 | — | 9,161 | ||||||||||||
Total Direct Costs of Rental Operations | 12,283 | 13,287 | 5,146 | — | 30,716 | ||||||||||||
Costs of Sales | 4,071 | 4,319 | 106 | 2,276 | 10,772 | ||||||||||||
Total Costs of Revenues | 16,354 | 17,606 | 5,252 | 2,276 | 41,488 | ||||||||||||
Gross Profit (Loss) | |||||||||||||||||
Rental | 12,732 | 9,717 | 8,613 | — | 31,062 | ||||||||||||
Rental Related Services | 1,485 | 71 | 607 | — | 2,163 | ||||||||||||
Rental Operations | 14,217 | 9,788 | 9,220 | — | 33,225 | ||||||||||||
Sales | 1,472 | 2,678 | 44 | 554 | 4,748 | ||||||||||||
Other | 87 | 378 | 17 | — | 482 | ||||||||||||
Total Gross Profit | 15,776 | 12,844 | 9,281 | 554 | 38,455 | ||||||||||||
Selling and Administrative Expenses | 7,070 | 5,623 | 3,411 | 546 | 16,650 | ||||||||||||
Income from Operations | $ | 8,706 | $ | 7,221 | $ | 5,870 | $ | 8 | 21,805 | ||||||||
Interest Expense | 1,539 | ||||||||||||||||
Provision for Income taxes | 7,523 | ||||||||||||||||
Net Income | $ | 12,743 | |||||||||||||||
Other Information | |||||||||||||||||
Average Rental Equipment 1 | $ | 496,397 | $ | 250,651 | $ | 122,964 | |||||||||||
Average Monthly Total Yield 2 | 1.39 | % | 2.99 | % | 3.18 | % | |||||||||||
Average Utilization 3 | 67.4 | % | 66.2 | % | 81.8 | % | |||||||||||
Average Monthly Rental Rate 4 | 2.07 | % | 4.51 | % | 3.89 | % |
-
Average Rental Equipment represents the cost of rental equipment
excluding accessory equipment. For
Mobile Modular andAdler Tanks , Average Rental Equipment also excludes new equipment inventory. -
Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by
the cost of rental equipment, for the period. -
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
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 |
|||||||||||||||||
(dollar amounts in thousands) |
Mobile |
TRS- |
Adler |
Enviroplex |
Consolidated |
||||||||||||
Revenues | |||||||||||||||||
Rental | $ | 79,969 | $ | 95,694 | $ | 59,243 | $ | — | $ | 234,906 | |||||||
Rental Related Services | 24,063 | 3,133 | 12,290 | — | 39,486 | ||||||||||||
Rental Operations | 104,032 | 98,827 | 71,533 | — | 274,392 | ||||||||||||
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 Equipment | 13,780 | 38,039 | 8,368 | — | 60,187 | ||||||||||||
Rental Related Services | 18,835 | 2,848 | 9,009 | — | 30,692 | ||||||||||||
Other | 21,940 | 13,272 | 4,647 | — | 39,859 | ||||||||||||
Total Direct Costs of Rental Operations | 54,555 | 54,159 | 22,024 | — | 130,738 | ||||||||||||
Costs of Sales | 14,861 | 14,087 | 315 | 15,878 | 45,141 | ||||||||||||
Total Costs of Revenues | 69,416 | 68,246 | 22,339 | 15,878 | 175,879 | ||||||||||||
Gross Profit (Loss) | |||||||||||||||||
Rental | 44,249 | 44,383 | 46,228 | — | 134,860 | ||||||||||||
Rental Related Services | 5,228 | 285 | 3,281 | — | 8,794 | ||||||||||||
Rental Operations | 49,477 | 44,668 | 49,509 | — | 143,654 | ||||||||||||
Sales | 5,291 | 11,077 | (37 | ) | 4,910 | 21,241 | |||||||||||
Other | 425 | 1,324 | 147 | — | 1,896 | ||||||||||||
Total Gross Profit | 55,193 | 57,069 | 49,619 | 4,910 | 166,791 | ||||||||||||
Selling and Administrative Expenses | 32,131 | 25,921 | 16,698 | 3,377 | 78,127 | ||||||||||||
Income from Operations | $ | 23,062 | $ | 31,148 | $ | 32,921 | $ | 1,533 | 88,664 | ||||||||
Interest Expense | 7,606 | ||||||||||||||||
Provision for Income taxes | 31,456 | ||||||||||||||||
Net Income | $ | 49,602 | |||||||||||||||
Other Information | |||||||||||||||||
Average Rental Equipment 1 | $ | 504,276 | $ | 258,995 | $ | 157,917 | |||||||||||
Average Monthly Total Yield 2 | 1.32 | % | 3.08 | % | 3.13 | % | |||||||||||
Average Utilization 3 | 67.1 | % | 66.0 | % | 86.2 | % | |||||||||||
Average Monthly Rental Rate 4 | 1.97 | % | 4.66 | % | 3.63 | % |
-
Average Rental Equipment represents the cost of rental equipment
excluding accessory equipment. For
Mobile Modular andAdler Tanks , Average Rental Equipment also excludes new equipment inventory. -
Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the
cost of rental equipment, for the period. -
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
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, 2010 |
|||||||||||||||||
(dollar amounts in thousands) |
Mobile |
TRS- |
Adler |
Enviroplex |
Consolidated |
||||||||||||
Revenues | |||||||||||||||||
Rental | $ | 82,648 | $ | 82,540 | $ | 35,427 | $ | — | $ | 200,615 | |||||||
Rental Related Services | 22,947 | 2,240 | 9,515 | — | 34,702 | ||||||||||||
Rental Operations | 105,595 | 84,780 | 44,942 | — | 235,317 | ||||||||||||
Sales | 20,685 | 21,443 | 232 | 11,695 | 54,055 | ||||||||||||
Other | 432 | 1,539 | 57 | — | 2,028 | ||||||||||||
Total Revenues | 126,712 | 107,762 | 45,231 | 11,695 | 291,400 | ||||||||||||
Costs and Expenses | |||||||||||||||||
Direct Costs of Rental Operations: | |||||||||||||||||
Depreciation of Rental Equipment | 13,734 | 37,017 | 5,648 | — | 56,399 | ||||||||||||
Rental Related Services | 17,156 | 2,001 | 7,385 | — | 26,542 | ||||||||||||
Other | 23,087 | 12,587 | 4,333 | — | 40,007 | ||||||||||||
Total Direct Costs of Rental Operations | 53,977 | 51,605 | 17,366 | — | 122,948 | ||||||||||||
Costs of Sales | 15,833 | 12,682 | 180 | 8,942 | 37,637 | ||||||||||||
Total Costs of Revenues | 69,810 | 64,287 | 17,546 | 8,942 | 160,585 | ||||||||||||
Gross Profit | |||||||||||||||||
Rental | 45,827 | 32,936 | 25,446 | — | 104,209 | ||||||||||||
Rental Related Services | 5,791 | 239 | 2,130 | — | 8,160 | ||||||||||||
Rental Operations | 51,618 | 33,175 | 27,576 | — | 112,369 | ||||||||||||
Sales | 4,852 | 8,761 | 52 | 2,753 | 16,418 | ||||||||||||
Other | 432 | 1,539 | 57 | — | 2,028 | ||||||||||||
Total Gross Profit | 56,902 | 43,475 | 27,685 | 2,753 | 130,815 | ||||||||||||
Selling and Administrative Expenses | 28,309 | 22,421 | 12,161 | 2,688 | 65,579 | ||||||||||||
Income from Operations | $ | 28,593 | $ | 21,054 | $ | 15,524 | $ | 65 | 65,236 | ||||||||
Interest Expense | 6,186 | ||||||||||||||||
Provision for Income taxes | 22,571 | ||||||||||||||||
Net Income | $ | 36,479 | |||||||||||||||
Other Information | |||||||||||||||||
Average Rental Equipment 1 | $ | 491,364 | $ | 244,425 | $ | 101,263 | |||||||||||
Average Monthly Total Yield 2 | 1.40 | % | 2.81 | % | 2.92 | % | |||||||||||
Average Utilization 3 | 67.7 | % | 66.0 | % | 76.0 | % | |||||||||||
Average Monthly Rental Rate 4 | 2.07 | % | 4.26 | % | 3.84 | % |
-
Average Rental Equipment represents the cost of rental equipment
excluding accessory equipment. For
Mobile Modular andAdler Tanks , Average Rental Equipment also excludes new equipment inventory. -
Average Monthly Total Yield is calculated by dividing the averages of
monthly rental revenues by the
cost of rental equipment, for the period. -
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
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
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 and evaluate 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
Reconciliation of Net Income to Adjusted EBITDA |
||||||||||||||||
(dollar amounts in thousands) |
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Net Income | $ | 13,227 | $ | 12,743 | $ | 49,602 | $ | 36,479 | ||||||||
Provision for Income Taxes | 8,004 | 7,523 | 31,456 | 22,571 | ||||||||||||
Interest | 2,119 | 1,539 | 7,606 | 6,186 | ||||||||||||
Income from Operations | 23,350 | 21,805 | 88,664 | 65,236 | ||||||||||||
Depreciation and Amortization | 17,649 | 16,308 | 67,395 | 62,577 | ||||||||||||
Non-Cash Stock-Based Compensation | 1,512 | 1,072 | 5,221 | 4,227 | ||||||||||||
Adjusted EBITDA 1 | $ | 42,511 | $ | 39,185 | $ | 161,280 | $ | 132,040 | ||||||||
Adjusted EBITDA Margin 2 | 50 | % | 49 | % | 47 | % | 45 | % |
Reconciliation of Adjusted EBITDA to Net Cash Provided by Operating Activities |
||||||||||||||||
(dollar amounts in thousands) |
Three Months Ended
December 31, |
Twelve Months Ended
December 31, |
||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Adjusted EBITDA 1 | $ | 42,511 | $ | 39,185 | $ | 161,280 | $ | 132,040 | ||||||||
Interest Paid | (3,171 | ) | (1,776 | ) | (6,877 | ) | (6,306 | ) | ||||||||
Net Income Taxes (Paid) Refunds Received | 4,915 | (1,312 | ) | 1,480 | (9,342 | ) | ||||||||||
Gain on Sale of Rental Equipment | (2,731 | ) | (3,583 | ) | (12,444 | ) | (11,728 | ) | ||||||||
Change in certain assets and liabilities: | ||||||||||||||||
Accounts Receivable, net | (3,030 | ) | 12,423 | (16,183 | ) | (5,891 | ) | |||||||||
Prepaid Expenses and Other Assets | (3,117 | ) | 1,645 | (3,226 | ) | 296 | ||||||||||
Accounts Payable and Other Liabilities | (10,198 | ) | (3,780 | ) | 4,004 | 2,483 | ||||||||||
Deferred Income | (364 | ) | (8,351 | ) | 1,277 | (954 | ) | |||||||||
Net Cash Provided by Operating Activities | $ | 24,815 | $ | 34,451 | $ | 129,311 | $ | 100,598 |
-
Adjusted EBITDA is defined as net income before interest expense,
provision for income taxes,
depreciation, amortization, and non-cash stock-based compensation. - Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total revenues for the period.
Source:
McGrath RentCorp
Keith E. Pratt
Chief Financial Officer
925-606-9200