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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------------------------
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 3, 2006
----------------------------------------------------------------
McGRATH RENTCORP
(Exact name of registrant as specified in its Charter)
California
(State or other jurisdiction of incorporation)
0-13292 94-2579843
(Commission File Number) (I.R.S. Employee Identification No.)
5700 Las Positas Road, Livermore, CA 94551-7800
(Address of principal executive offices)
(925) 606-9200
(Registrant's Telephone Number, Including Area Code)
----------------------------------------------------
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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1
Item 2.02 Results of Operations and Financial Condition.
On August 3, 2006, McGrath RentCorp (the "Company") announced via press
release the Company's results for its second quarter ended June 30, 2006. A copy
of the Company's press release is attached hereto as Exhibit 99.1. This Form 8-K
and the attached exhibit are provided under Items 2.02 and 9.01 of Form 8-K and
are furnished to, but not filed with, the Securities and Exchange Commission.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
----------- -----------
99.1 Press Release of McGrath RentCorp, dated August 3, 2006.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
McGRATH RENTCORP
Dated: August 3, 2006 By: /s/ Keith E. Pratt
--------------------------------------
Keith E. Pratt
Vice President and Chief Financial Officer
3
Exhibit 99.1
McGrath RentCorp Announces Results for Second Quarter 2006; Q2 EPS of $0.34;
Rental Revenues Increase 12%
LIVERMORE, Calif.--(BUSINESS WIRE)--Aug. 3, 2006--McGrath RentCorp
(NASDAQ:MGRC) today announced revenues for the quarter ended June 30,
2006, of $60.7 million, a decrease of 5%, compared to $63.9 million in
the second quarter 2005. The Company reported net income for the
second quarter 2006 of $8.7 million, or $0.34 per diluted share,
compared to $9.5 million, or $0.38 per diluted share, in the second
quarter 2005.
During the second quarter 2006, the Company recorded a $0.9
million reduction to the provision for income taxes, or $0.03 per
diluted share, due to the reduction in the Company's deferred tax
liability as a result of a franchise tax law change enacted by the
state of Texas in May 2006. The reduction in taxes was partly offset
by $0.7 million of non-cash stock compensation expense included in the
second quarter 2006 results due to the adoption of Statement of
Financial Accounting Standards No. 123 (revised 2004), "Share-Based
Payment", ("SFAS No. 123R") effective January 1, 2006.
For the Company's Mobile Modular division, pre-tax income
decreased 21% to $8.3 million from $10.5 million in the second quarter
2005. Rental revenues increased 10%, or $2.0 million to $21.6 million,
offset by lower rental margins resulting in gross profit on rents
decreasing 2% to $11.9 million from $12.2 million in second quarter
2005. Lower rental margins were the result of increased inventory
center labor and material costs to prepare a higher volume of
buildings to meet increased demand for commercial projects and
California classroom inventory for the upcoming school year, and
higher depreciation expense due to the 13% increase in average rental
equipment. Sales revenues decreased $3.9 million with gross profit
decreasing $0.6 million. Total gross profit decreased 3% from $16.6
million in second quarter 2005 to $16.2 million in second quarter
2006. Selling and administrative expenses increased $1.1 million to
$5.9 million in the second quarter 2006, primarily due to higher
personnel and benefit costs to support increased rental activity
levels and $0.4 million of non-cash stock compensation expense related
to the adoption of SFAS No. 123R. Allocated interest expense increased
$0.7 million due to higher average interest rates and average debt
levels to support higher rental equipment purchases.
For the Company's TRS-RenTelco division, pre-tax income was $4.7
million for the second quarter 2006 and 2005. Rental revenues
increased 14% to $19.6 million compared to $17.2 million in the second
quarter of 2005 with gross profit on rents increasing 29% to $8.2
million from $6.4 million in the second quarter 2005. Sales revenues
decreased $3.9 million resulting in $1.1 million lower gross profit on
sales due to lower used equipment sales volume as a result of having
less underutilized rental equipment to sell. Selling and
administrative expenses increased $0.2 million due primarily to
non-cash stock compensation expense related to the adoption of SFAS
No. 123R. Allocated interest expense increased $0.3 million due to
higher average interest rates and average debt levels experienced by
the Company.
"Second quarter results were below our expectations," stated
Dennis Kakures, President & CEO. "Our results reflected a reduction in
both modular and electronics equipment sales, the most difficult
element in our businesses to forecast, and a reduction in gross profit
on rents for modulars due to higher inventory center expenses. Based
on our results to date and our current forecast for the remainder of
the year, we are reducing our 2006 guidance range to $1.42 to $1.49
per diluted share.
"While we are disappointed in our results for the quarter, we are
very pleased with the growth of rental revenues which is the key
metric of our business. Rental revenues for electronics grew quarter
over quarter at 14% and modulars at 10%. Strong growth in rental
assets typically speaks very favorably of our outlook for higher
rental revenue and profitability levels in the quarters ahead.
Accordingly, thus far in 2006 we increased the original cost of rental
assets by 14%, or $21 million for electronics and 8% or $31 million
for modulars.
"TRS-RenTelco's second quarter rental revenue results are a
reflection of the continuing improved market conditions that we spoke
to during our first quarter conference call. We are continuing to see
favorable market conditions in the third quarter to date. It's
important to note that the increase in rental business activity levels
is across a broad range of product segments and markets that we
believe is reflective of an increasingly positive outlook for the
longer term health of our test equipment rental business. We are
proactively purchasing the latest technology test equipment to support
the increased demand we are seeing.
"Pre-tax profit for TRS-RenTelco was flat compared to a year ago
mainly due to lower sales levels as a result of having less
underutilized equipment to sell. Sales levels can fluctuate quarter to
quarter based upon available equipment, customer demand and funding.
However, the success of our rental operations is what provides the
most significant and consistent earnings horsepower. With the gross
profit on rents increasing 29% to $8.2 million, our highest quarter
since the merger, our electronics rental business is beginning to find
its stride. As we have emphasized over the years, growth in rental
revenues, assets and gross profit on rents provide the most visibility
into the longer term earnings capability of our test equipment rental
business.
"Mobile Modular's increase in rental revenues over the second
quarter of 2005 is primarily related to classroom shipments in the
third and fourth quarters of last year. We should experience a full 12
months of rental revenues in 2006 on the great majority of the
classroom orders shipped in the second half of 2005. We had another
strong first half of the year in classroom rentals and expanding our
school customer base in the Florida market. Florida continues to have
very favorable student population growth and will be active for many
years ahead in implementing class size reduction for all grade levels.
We are buying significant quantities of classrooms to support the
demand for additional educational space in Florida.
"In California, we had satisfactory classroom rental booking
levels during the first half of the year. However, as expected, they
were not up to the level of the past few years due to the limited
availability of state bond monies for school modernization projects.
With the passage of a state-wide facilities bond measure in November
2006, we should see increased educational rental opportunities
beginning in early 2007. The need to modernize schools in California
continues to be high and we are positioning ourselves to take full
advantage of the anticipated increased opportunity levels in 2007.
Additionally, in the second quarter, we experienced a considerably
higher level of commercial rental opportunities, mainly driven by
increased business activity in residential and commercial
construction. Our broad inventory and ability to customize buildings
within our inventory centers enabled us to book a favorable level of
commercial opportunities during the second quarter. We should see
favorable rental revenue growth in the third quarter as a result of
classroom shipments and the increased level of commercial rental
activity.
"The decline in modulars pre-tax profit of 21% from a year ago
stems chiefly from an increase in inventory center expenses and lower
sales revenue.
"In the second quarter, we experienced approximately a $2 million
increase in inventory center expenses. This resulted from our
continued efforts in preparing off rent classroom inventory for future
rental, as well as the increase in commercial business activity levels
and the need to modify or convert equipment for specific applications.
Additionally, due to increased market demand for commercial buildings,
we employed a larger than normal number of subcontractors, at higher
labor rates compared to our in-house staff. It's important to note
that although the great majority of the expenses to prepare equipment
are fully absorbed in our second quarter results, the rental revenue
benefit will be recognized over the quarters ahead. We also
experienced higher than customary field service expenses during the
quarter. While field service issues occur from time to time, this was
a larger than normal effort with the majority of expenses incurred in
the second quarter. We should see marked improvement in our modular
operating profit levels beginning in the third quarter with gross
margin on rents expected to return to the 60% or higher range as
inventory center expenses decline and rental revenues increase.
"Although modular sales revenues fell short of our expectations
for the quarter, we do not believe this presents any significant
concern for our modular business' longer-term earnings outlook. We
view sales as a byproduct of being in the rental business and although
we are actively engaged in selling both new and used equipment, we
focus our sales force on rentals which carry approximately twice the
margin as sales and provide a much more stable and enduring income
stream. Rental revenue growth is truly our economic engine.
"The rental markets for both electronics and modulars continue to
be very favorable as reflected in double-digit rental revenue growth
for the quarter for each division and our level of investment in new
rental assets year to date. Our focus on creating sustainable earnings
growth over the long-term through an increasing base of rental
customers and higher rental revenues remains steadfast."
SECOND QUARTER 2006 HIGHLIGHTS (AS COMPARED TO SECOND QUARTER
2005)
-- Rental revenues increased 12% to $41.2 million. Within rental
revenues, Mobile Modular increased 10% from $19.6 million to
$21.6 million; TRS-RenTelco increased 14% from $17.2 million
to $19.6 million.
-- Sales revenues decreased 42% to $11.8 million, resulting from
lower sales volume at Mobile Modular, TRS-RenTelco and
Enviroplex. Lower sales volume was offset by a higher gross
margin percentage of 27.3% in 2006 compared to 26.3% in 2005,
resulting in a gross profit decrease of $2.1 million. Sales
revenues and related gross margins can fluctuate from quarter
to quarter depending on customer requirements, equipment
availability and funding.
-- Depreciation of rental equipment increased 5% to $11.3
million, with Mobile Modular increasing 18% to $2.6 million
from $2.2 million in 2005, and TRS-RenTelco increasing 2% to
$8.7 million from $8.5 million in 2005.
-- Provision for income taxes was reduced $0.9 million during the
second quarter 2006 to record the impact to the Company's
deferred tax liability from a franchise tax law change enacted
by the state of Texas in May 2006. As a result, the Company's
effective tax rate was 32.1% for the second quarter 2006
compared with 38.0% during the same period in 2005. Excluding
the impact of the Texas law change, the provision for income
taxes was based on an effective tax rate of 39.0%.
-- Debt increased $13.0 million during the quarter to $189.5
million, with the Company's total liabilities to equity ratio
increasing from 1.68 to 1 at March 31, 2006 to 1.71 to 1 as of
June 30, 2006. As of June 30, 2006, the Company, under its
lines of credit, had capacity to borrow an additional $65.5
million.
-- Dividend rate increased 14% to $0.16 per share for the second
quarter 2006, as compared to $0.14 per share for the second
quarter of 2005. On an annualized basis, this dividend
represents a 2.4% yield on the August 2, 2006 close price of
$26.35.
It is suggested that the press release be read in conjunction with
the financial statements and notes thereto included in the Company's
latest Form 10-K and Forms 10-Q. You can visit the Company's web site
at www.mgrc.com to access information on McGrath RentCorp, including
the latest filings on Form 10-K and Form 10-Q.
FINANCIAL GUIDANCE
The Company revises its previous full-year 2006 earnings guidance
range of $1.50 to $1.60 to an updated range of $1.42 to $1.49 per
diluted share. Such a forward-looking statement reflects McGrath
RentCorp's expectations as of August 3, 2006. Actual 2006 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, the Company, under the trade name Mobile Modular
Management Corporation, rents and sells modular buildings to fulfill
customers' temporary and permanent space needs in California, Texas
and Florida. Mobile Modular believes it is the largest provider of
relocatable classrooms for rental to school districts for grades K -
12 in California. The Company's TRS-RenTelco division rents and sells
electronic test equipment and is one of the leading providers of
general purpose and communications test equipment in North America.
CONFERENCE CALL NOTE: As previously announced in its press release
of July 6, 2006, McGrath RentCorp will host a conference call at 5:00
p.m. Eastern Time (2:00 p.m. Pacific Time) on August 3, 2006 to
discuss the second quarter 2006 results. To participate in the
teleconference, dial 1-800-218-0713 (in the U.S.), or 1-303-262-2130
(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 48 hours following the call by dialing 1-800-405-2236
(in the U.S.), or 1-303-590-3000 (outside the U.S.). The pass code for
the call replay is 11064495
This press release contains statements, which constitute
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and are subject to a number
of risks and uncertainties. These statements appear in a number of
places. Such statements can be identified by the use of
forward-looking terminology such as "believes", "expects", "may",
"estimates", "will", "should", "plans" or "anticipates" or the
negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy. These include: our belief
of a continuation of improving market conditions for our TRS-RenTelco
business, including the increased demand for our test equipment; our
belief that our electronics rental business is beginning to find its
stride; our expectation of an increasingly positive outlook for the
longer term health of our test equipment rental business; our
expectation that growth in rental assets will result in higher rental
revenue and profitability levels in the quarters ahead; our
expectation that there will be continued demand for additional
educational space in Florida; our expectation that there will be
increased demand for commercial projects and California classroom
inventory for the upcoming school year; our view that growth in rental
revenues, assets and gross profit on rents provide the most visibility
into the longer term earnings capability of our test equipment rental
business; our expectation that we will experience a full 12 months of
rental revenues in 2006 on the great majority of the classroom orders
shipped in the second half of 2005; our expectation that Florida will
be active for many years ahead in implementing class size reduction
for all grade levels; our expectation that the need to modernize
schools in California will result in increased opportunity levels in
2007; our expectation that the passage of a California state-wide
facilities bond measure in November 2006 will lead to increased
educational rental opportunities beginning in early 2007; our
expectation that we should see favorable rental revenue growth in the
third quarter as a result of classroom shipments and the increased
level of commercial rental activity; our expectation that we will
recognize over the quarters ahead, the rental revenue benefit from the
expenses to prepare equipment that were fully absorbed in our second
quarter results; our expectation that we will see marked improvement
in our modular operating profit levels beginning in the third quarter
with gross margin on rents expected to return to the 60% or higher
range as inventory center expenses decline and rental revenues
increase; and our belief that, modular sales revenues falling short of
our expectations for the quarter does not present any significant
concern for our modular business' longer-term earnings outlook. These
forward-looking statements are not guarantees of future performance
and involve significant risks and uncertainties. Actual results may
vary materially from those in the forward-looking statements as a
result of various factors. Important factors that could cause actual
results to differ materially from the Company's expectations are
disclosed under "Risk Factors" and elsewhere in the company's 10-K,
10-Q and other SEC filings, including, the effectiveness of
management's strategies and decisions, general economic and business
conditions, economic conditions in the markets in which the Company
conducts the majority of its business, fluctuations in interest rates
and the Company's ability to manage credit risk, retention and
motivation of key personnel, ability to finance expansion and to
locate and consummate acquisitions, the condition of the
telecommunications industry, new or modified statutory or regulatory
requirements, continuing demand for modular products, timely delivery
and installation of modular products, delays of future sales projects,
and intense industry competition,. There may be other factors not
listed above that could cause actual results to vary materially from
the forward-looking statements described in this press release.
MCGRATH RENTCORP
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
- ----------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
(in thousands, except per share
amounts) 2006 2005 2006 2005
- ------------------------------- -------- -------- --------- --------
Revenues
- --------
Rental $41,168 $36,801 $ 80,839 $ 72,760
Rental Related Services 7,099 6,235 14,166 11,510
------- ------- -------- --------
Rental Operations 48,267 43,036 95,005 84,270
Sales 11,769 20,135 22,267 31,107
Other 637 694 1,257 1,426
------- ------- -------- --------
Total Revenues 60,673 63,865 118,529 116,803
------- ------- -------- --------
Costs and Expenses
- ------------------
Direct Costs of Rental
Operations
Depreciation of Rental
Equipment 11,314 10,762 22,172 22,327
Rental Related Services 4,748 4,161 9,708 7,732
Other 9,763 7,479 17,769 14,724
------- ------- -------- --------
Total Direct Costs of
Rental Operations 25,825 22,402 49,649 44,783
Costs of Sales 8,559 14,844 15,888 22,408
------- ------- -------- --------
Total Costs 34,384 37,246 65,537 67,191
------- ------- -------- --------
Gross Profit 26,289 26,619 52,992 49,612
Selling and Administrative 10,802 9,420 22,536 18,981
------- ------- -------- --------
Income from Operations 15,487 17,199 30,636 30,631
Interest 2,773 1,912 5,126 3,631
------- ------- -------- --------
Income Before Provision for
Income Taxes 12,714 15,287 25,510 27,000
Provision for Income Taxes 4,078 5,809 9,069 10,260
------- ------- -------- --------
Income Before Minority
Interest 8,636 9,478 16,441 16,740
Minority Interest in Income
(Loss) of Subsidiary (33) 12 (65) 97
------- ------- -------- --------
Net Income $ 8,669 $ 9,466 $ 16,506 $ 16,643
======= ======= ======== ========
Earnings Per Share:
Basic $ 0.35 $ 0.38 $ 0.66 $ 0.68
Diluted $ 0.34 $ 0.38 $ 0.66 $ 0.66
Shares Used in Per Share
Calculation:
Basic 24,956 24,627 24,911 24,600
Diluted 25,209 25,224 25,211 25,177
MCGRATH RENTCORP
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
- ----------------------------------------------------------------------
June 30, Dec. 31,
---------- ----------
(in thousands) 2006 2005
- -------------- ---------- ---------
Assets
- ------
Cash $ 385 $ 276
Accounts Receivable, net of allowance for
doubtful accounts of $1,000 in 2006 and 2005 53,644 63,702
Rental Equipment, at cost:
Relocatable Modular Buildings 439,615 408,227
Electronic Test Equipment 175,633 154,708
--------- ---------
615,248 562,935
Less Accumulated Depreciation (172,648) (156,502)
--------- ---------
Rental Equipment, net 442,600 406,433
--------- ---------
Property, Plant and Equipment, net 56,461 56,008
Prepaid Expenses and Other Assets 17,650 16,019
--------- ---------
Total Assets $ 570,740 $ 542,438
========= =========
Liabilities and Shareholders' Equity
- ------------------------------------
Liabilities:
Notes Payable $ 189,500 $ 163,222
Accounts Payable and Accrued Liabilities 49,259 51,690
Deferred Income 19,936 27,410
Minority Interest in Subsidiary 3,134 3,199
Deferred Income Taxes, net 98,307 98,438
--------- ---------
Total Liabilities 360,136 343,969
--------- ---------
Shareholders' Equity:
Common Stock, no par value -
Authorized -- 40,000 shares
Issued and Outstanding -- 24,964 shares in
2006 and 24,832 shares in 2005 29,839 26,224
Retained Earnings 180,765 172,245
--------- ---------
Total Shareholders' Equity 210,604 198,469
--------- ---------
Total Liabilities and Shareholders'
Equity $ 570,740 $ 542,438
========= =========
MCGRATH RENTCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30,
-------------------
(in thousands) 2006 2005
- -------------- --------- --------
Cash Flows from Operating Activities:
- -------------------------------------
Net Income $ 16,506 $ 16,643
Adjustments to Reconcile Net Income to Net Cash
Provided
by Operating Activities:
Depreciation 23,223 23,477
Provision for Doubtful Accounts 171 219
Non-Cash Stock Compensation 1,548 --
Gain on Sale of Rental Equipment (4,134) (4,910)
Change In:
Accounts Receivable 9,887 (8,265)
Prepaid Expenses and Other Assets (1,631) (887)
Accounts Payable and Accrued Liabilities 4,375 (1,420)
Deferred Income (7,474) (4,579)
Deferred Income Taxes (131) 5,392
-------- --------
Net Cash Provided by Operating Activities 42,340 25,670
-------- --------
Cash Flows from Investing Activities:
- -------------------------------------
Purchase of Rental Equipment (71,047) (49,272)
Purchase of Property, Plant and Equipment (1,505) (1,098)
Proceeds from Sale of Rental Equipment 9,457 15,481
-------- --------
Net Cash Used in Investing Activities (63,095) (34,889)
-------- --------
Cash Flows from Financing Activities:
- -------------------------------------
Net Borrowings Under Bank Lines of Credit 26,268 14,112
Proceeds from the Exercise of Stock Options 1,441 1,265
Excess Tax Benefit from Exercise and
Disqualifying Disposition of Stock Options 626 428
Payment of Dividends (7,471) (6,146)
-------- --------
Net Cash Provided by Financing Activities 20,864 9,659
-------- --------
Net Increase in Cash 109 440
Cash Balance, beginning of period 276 189
-------- --------
Cash Balance, end of period $ 385 $ 629
======== ========
Interest Paid, during the period $ 5,017 $ 3,637
======== ========
Income Taxes Paid, during the period $ 8,573 $ 5,592
======== ========
Dividends Declared, not yet paid $ 3,994 $ 3,452
======== ========
Rental Equipment Acquisitions, not yet paid $ 7,308 $ 9,842
======== ========
Mobile Modular - Q2 2006 compared to Q2 2005 (Unaudited)
(dollar amounts in thousands) Three Months Ended Increase
June 30, (Decrease)
-------------------- --------------
2006 2005 $ %
--------- --------- -------------
Revenues
- --------
Rental Revenues $ 21,602 $ 19,586 $ 2,016 10%
Rental Related Services 6,779 5,811 968 17%
--------- --------- --------
Rental Operations 28,381 25,397 2,984 12%
Sales 7,332 11,185 (3,853) -34%
Other 178 161 17 11%
--------- --------- --------
Total Revenues $ 35,891 $ 36,743 $ (852) -2%
--------- --------- --------
Gross Profit
- ------------
Rental Revenues $ 11,858 $ 12,158 $ (300) -2%
Rental Related Services 2,397 1,891 506 27%
--------- --------- --------
Rental Operations 14,255 14,049 206 1%
Sales 1,793 2,439 (646) -26%
Other 178 161 17 11%
--------- --------- --------
Total Gross Profit $ 16,226 $ 16,649 $ (423) -3%
--------- --------- --------
-------------------- ---------
Pre-tax Income $ 8,301 $ 10,493 $ (2,192) -21%
--------- --------- --------
Other Information
- -----------------
Depreciation of Rental Equipment $ 2,618 $ 2,228 $ 390 18%
Interest Expense Allocation 2,043 1,363 680 50%
Average Rental Equipment (1) $ 372,051 $ 329,024 $ 43,027 13%
Average Rental Equipment on Rent
(1) 307,599 281,787 25,812 9%
Average Monthly Total Yield (2) 1.94% 1.98% -2%
Average Utilization (3) 82.7% 85.6% -3%
Average Monthly Rental Rate (4) 2.34% 2.32% 1%
Period End Rental Equipment (1) $ 375,227 $ 337,564 $ 37,663 11%
Period End Utilization (3) 83.3% 85.9% -3%
Period End Floors (1) 23,422 21,666 1,756 8%
(1) Average and Period End Rental Equipment represents the cost of
rental equipment excluding new equipment inventory and accessory
equipment. Period End Floors excludes new equipment inventory.
(2) Average Monthly Total Yield is calculated by dividing the
averages of monthly rents by the cost of rental equipment, for the
period.
(3) Period End Utilization is calculated by dividing the cost of
rental equipment on rent by the total cost of rental equipment
excluding new equipment inventory and accessory equipment. Average
Utilization for the period is calculated using the average costs of
the rental equipment.
(4) Average Monthly Rental Rate is calculated by dividing the
averages of monthly rents by the cost of rental equipment on rent, for
the period.
TRS-RenTelco - Q2 2006 compared to Q2 2005 (Unaudited)
(dollar amounts in thousands) Three Months Ended Increase
June 30, (Decrease)
------------------- -------------
2006 2005 $ %
-------- -------- ------------
Revenues
- --------
Rental Revenues $ 19,566 $ 17,215 $ 2,351 14%
Rental Related Services 320 424 (104) -25%
-------- -------- -------
Rental Operations 19,886 17,639 2,247 13%
Sales 3,223 7,135 (3,912) -55%
Other 459 533 (74) -14%
-------- -------- -------
Total Revenues $ 23,568 $ 25,307 $(1,739) -7%
-------- -------- -------
Gross Profit
- ------------
Rental Revenues $ 8,233 $ 6,402 $ 1,831 29%
Rental Related Services (46) 183 (229)-125%
-------- -------- -------
Rental Operations 8,187 6,585 1,602 24%
Sales 1,127 2,191 (1,064) -49%
Other 459 533 (74) -14%
-------- -------- -------
Total Gross Profit $ 9,773 $ 9,309 $ 464 5%
-------- -------- -------
--------- --------- --------
Pre-tax Income $ 4,688 $ 4,717 $ (29) -1%
-------- -------- -------
Other Information
- -----------------
Depreciation of Rental Equipment $ 8,696 $ 8,534 $ 162 2%
Interest Expense Allocation 862 600 262 44%
Average Rental Equipment (1) $167,478 $149,771 $17,707 12%
Average Rental Equipment on Rent (1) 119,061 96,278 22,783 24%
Average Monthly Total Yield (2) 3.89% 3.83% 2%
Average Utilization (3) 71.1% 64.3% 11%
Average Monthly Rental Rate (4) 5.48% 5.96% -8%
Period End Rental Equipment (1) $173,910 $150,032 $23,878 16%
Period End Utilization (3) 71.3% 66.5% 7%
(1) Average and Period End Rental Equipment represents the cost of
rental equipment excluding accessory equipment.
(2) Average Monthly Total Yield is calculated by dividing the
averages of monthly rents by the cost of rental equipment, for the
period.
(3) Period End Utilization is calculated by dividing the cost of
rental equipment on rent by the total cost of rental equipment
excluding accessory equipment. Average Utilization for the period is
calculated using the average costs of the rental equipment.
(4) Average Monthly Rental Rate is calculated by dividing the
averages of monthly rents by the cost of rental equipment on rent, for
the period.
Mobile Modular - Six Months Ended 6/30/06 compared to Six Months
Ended 6/30/05 (Unaudited)
(dollar amounts in thousands) Six Months Ended Increase
June 30, (Decrease)
-------------------- -------------
2006 2005 $ %
-------- -------- ------------
Revenues
- --------
Rental Revenues $ 43,010 $ 38,612 $ 4,398 11%
Rental Related Services 13,545 10,779 2,766 26%
-------- -------- --------
Rental Operations 56,555 49,391 7,164 15%
Sales 12,095 13,781 (1,686)-12%
Other 361 300 61 20%
-------- -------- --------
Total Revenues $ 69,011 $ 63,472 $ 5,539 9%
-------- -------- --------
Gross Profit
- ------------
Rental Revenues $ 25,234 $ 24,530 $ 704 3%
Rental Related Services 4,635 3,532 1,103 31%
-------- -------- --------
Rental Operations 29,869 28,602 1,807 6%
Sales 3,135 3,396 (261) -8%
Other 361 300 61 20%
-------- -------- --------
Total Gross Profit $ 33,365 $ 31,758 $ 1,607 5%
-------- -------- --------
--------- --------- ---------
Pre-tax Income $ 17,364 $ 19,786 $ (2,422)-12%
-------- -------- --------
Other Information
- ------------------
Depreciation of Rental Equipment $ 5,138 $ 4,392 $ 746 17%
Interest Expense Allocation 3,789 2,575 1,214 47%
Average Rental Equipment (1) $370,418 $326,363 $44,055 13%
Average Rental Equipment on Rent (1) 306,861 279,693 21,168 10%
Average Monthly Total Yield (2) 1.94% 1.97% -2%
Average Utilization (3) 82.8% 85.7% -3%
Average Monthly Rental Rate (4) 2.34% 2.30% 2%
Period End Rental Equipment (1) $375,227 $337,564 $37,663 11%
Period End Utilization (3) 83.3% 85.9% -3%
Period End Floors (1) 23,422 21,666 1,756 8%
(1) Average and Period End Rental Equipment represents the cost of
rental equipment excluding new equipment inventory and accessory
equipment. Period End Floors excludes new equipment inventory.
(2) Average Monthly Total Yield is calculated by dividing the
averages of monthly rents by the cost of rental equipment, for the
period.
(3) Period End Utilization is calculated by dividing the cost of
rental equipment on rent by the total cost of rental equipment
excluding new equipment inventory and accessory equipment. Average
Utilization for the period is calculated using the average costs of
the rental equipment.
(4) Average Monthly Rental Rate is calculated by dividing the
averages of monthly rents by the cost of rental equipment on rent, for
the period.
TRS-RenTelco - Six Months Ended 6/30/06 compared to Six Months
Ended 6/30/05 (Unaudited)
(dollar amounts in thousands) Six Months Ended Increase
June 30, (Decrease)
--------------------- --------------
2006 2005 $ %
---------- -------- -------------
Revenues
- --------
Rental Revenues $ 37,829 $ 34,148 $ 3,681 11%
Rental Related Services 621 731 (110) -15%
---------- -------- --------
Rental Operations 38,450 34,879 3,571 10%
Sales 7,702 13,219 (5,517) -42%
Other 896 1,126 (230) -20%
---------- -------- --------
Total Revenues $ 47,048 $ 49,224 $ (2,176) -4%
---------- -------- --------
Gross Profit
- ------------
Rental Revenues $ 15,664 $ 11,179 $ 4,485 40%
Rental Related Services (177) 246 (423)-172%
---------- -------- --------
Rental Operations 15,487 11,425 4,062 36%
Sales 2,841 3,683 (842) -23%
Other 896 1,126 (230) -20%
---------- -------- --------
Total Gross Profit $ 19,224 $ 16,234 $ 2,990 18%
---------- -------- --------
----------- --------- ---------
Pre-tax Income $ 8,680 $ 6,653 $ 2,027 30%
---------- -------- --------
Other Information
- -----------------
Depreciation of Rental Equipment $ 17,034 $ 17,935 $ (901) -5%
Interest Expense Allocation 1,580 1,172 408 35%
Average Rental Equipment (1) $ 162,457 $149,720 $ 12,737 9%
Average Rental Equipment on Rent
(1) 114,143 94,501 19,642 21%
Average Monthly Total Yield (2) 3.88% 3.80% 2%
Average Utilization (3) 70.3% 63.1% 11%
Average Monthly Rental Rate (4) 5.52% 6.02% -8%
Period End Rental Equipment (1) $ 173,910 $150,032 $ 23,878 16%
Period End Utilization (3) 71.3% 66.5% 7%
(1) Average and Period End Rental Equipment represents the cost of
rental equipment excluding accessory equipment.
(2) Average Monthly Total Yield is calculated by dividing the
averages of monthly rents by the cost of rental equipment, for the
period.
(3) Period End Utilization is calculated by dividing the cost of
rental equipment on rent by the total cost of rental equipment
excluding accessory equipment. Average Utilization for the period is
calculated using the average costs of the rental equipment.
(4) Average Monthly Rental Rate is calculated by dividing the
averages of monthly rents by the cost of rental equipment on rent, for
the period.
CONTACT: McGrath RentCorp
Keith E. Pratt, 925-606-9200 (CFO)