8-K
false000075271400007527142022-10-272022-10-27

 

 

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): October 27, 2022

 

 

McGRATH RENTCORP

(Exact name of Registrant as Specified in Its Charter)

 

 

California

000-13292

94-2579843

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

5700 Las Positas Road

 

Livermore, California

 

94551-7800

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (925) 606-9200

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

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:

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))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common Stock

 

MGRC

 

NASDAQ Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

On October 27, 2022, McGrath RentCorp (the “Company”) announced via press release the Company’s results for its third quarter ended September 30, 2022. 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 Item 2.02 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission, and shall not be incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.
 

Exhibit No.

Description

 

 

99.1

Press Release of McGrath RentCorp, dated October 27, 2022.

104

Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

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 thereunto duly authorized.

 

 

 

McGRATH RENTCORP

 

 

 

 

Date:

October 27th, 2022

By:

/s/ Keith E. Pratt

 

 

 

Keith E. Pratt
Executive Vice President and Chief Financial Officer

 

3


EX-99.1

Exhibit 99.1

https://cdn.kscope.io/fe6d2f0226879b6b8b1b51a3a16604cd-img222354234_0.jpg 

Contact

Keith E. Pratt

EVP & Chief Financial Officer

925-606-9200

PRESS RELEASE

FOR RELEASE October 27, 2022

McGrath Announces Results for Third Quarter 2022

Livermore, Calif - October 27, 2022 – McGrath RentCorp (“McGrath” or the “Company”) (Nasdaq: MGRC), a leading business-to-business rental company in North America, today announced total revenues for the quarter ended September 30, 2022 of $200.5 million, an increase of 16%, compared to the third quarter of 2021. The Company reported net income of $30.6 million, or $1.25 per diluted share, for the third quarter of 2022, compared to net income of $23.3 million, or $0.95 per diluted share, for the third quarter of 2021.

 

THIRD QUARTER 2022 YEAR-OVER-YEAR Company HIGHLIGHTS:

Rental revenues increased 15% to $118.4 million.
Total revenues increased 16% to $200.5 million.
Adjusted EBITDA1 increased 13% to $74.7 million.
Dividend rate increased 5% to $0.455 per share for the third quarter of 2022. On an annualized basis, this dividend represents a 2.1% yield on the October 26, 2022 close price of $85.85 per share.

 

Joe Hanna, President and CEO of McGrath, made the following comments regarding these results and future expectations:

“We delivered strong third quarter results. Our 16% growth in total company revenues was a result of robust performance in both rental operations and sales revenues. Demand was healthy across each of our rental segments. Mobile Modular rental revenues grew 17%, reflecting strong organic growth from our modular operations. Rental revenue growth was also strong at TRS-RenTelco and Adler Tanks, which grew 9% and 18%, respectively.

 

Mobile Modular had an impressive quarter. We saw broad-based strength across our commercial, education and portable storage customer bases. Education rental revenues increased 9%, representing the highest growth since the first quarter of 2020 and demonstrating post-pandemic recovery in this important customer base. We addressed strong demand conditions with disciplined fleet management and achieved average fleet utilization of 80.1%, a level not seen since 2008, and ended the quarter at 81.2% utilization. This substantial utilization improvement was accomplished while growing our fleet and increasing average rental rates. Our initiatives to grow modular sales also showed progress as sales revenues increased by 10% compared to a year ago.

 

At TRS-RenTelco and Adler Tanks the positive trends we experienced in the first half of this year continued in the third quarter. TRS-RenTelco saw growth in both communications and general-purpose rentals. Adler Tanks continued to experience broad-based demand improvement across its regions and vertical markets, ending the quarter at 58.3% utilization, a level last achieved in 2018.

 

We are pleased with our year-to-date performance, and we have entered the fourth quarter with good momentum across the business. As a result, we are increasing our financial outlook for the full year.”

 

 


 

Division HIGHLIGHTS:

All comparisons presented below are for the quarter ended September 30, 2022 to the quarter ended September 30, 2021 unless otherwise indicated.

Mobile Modular

For the third quarter of 2022, the Company’s Mobile Modular division reported income from operations of $27.8 million, an increase of $4.3 million, or 18%, with Adjusted EBITDA increasing $3.6 million, or 10%, to $39.7 million. Rental revenues increased 17% to $69.1 million, depreciation expense increased 3% to $7.7 million and other direct costs increased 38% to $22.8 million, which resulted in an increase in gross profit on rental revenues of 10% to $38.5 million. The rental revenue increase was primarily attributed to higher average rental equipment on rent and higher average monthly rental rates. Rental related services revenues increased 12% to $27.4 million, primarily attributable to higher delivery and pick up activities for both modular buildings and portable storage containers with associated gross profit increasing 24% to $7.4 million. Sales revenues increased 10% to $28.9 million, primarily from higher used equipment sales. Gross margin on sales was 35% compared to 31% in 2021, resulting in a 24% increase in gross profit on sales revenues to $10.2 million. Selling and administrative expenses increased 10% to $28.8 million, primarily due to $1.6 million higher allocated corporate expenses and increased employee salaries and benefit costs totaling $1.2 million.

 

TRS-RenTelco

For the third quarter of 2022, the Company’s TRS-RenTelco division reported income from operations of $11.3 million, an increase of $1.8 million, or 19%, with Adjusted EBITDA increasing $1.9 million, or 9%, to $23.9 million. Rental revenues increased 9% to $31.8 million, depreciation expense increased 2% to $12.4 million and other direct costs increased 7% to $5.4 million, which resulted in a 16% increase in gross profit on rental revenues to $14.0 million. The rental revenue increase was the result of higher average equipment on rent and higher average monthly rental rates compared to the prior year. Sales revenues increased 16% to $5.5 million and gross profit on sales revenues increased 12% to $3.4 million. Selling and administrative expenses increased 12% to $6.7 million, primarily due to higher allocated corporate expenses.

Adler Tanks

For the third quarter of 2022, the Company’s Adler Tanks division reported income from operations of $5.5 million, an increase of $2.6 million, with Adjusted EBITDA increasing $2.5 million, or 32%, to $10.2 million. Rental revenues increased $2.6 million, or 18%, to $17.5 million, depreciation expense decreased 3% to $4.0 million and other direct costs increased 11% to $3.5 million, which resulted in an increased gross profit on rental revenues of 32%, to $10.0 million. The rental revenue increase was broad based across regions and vertical markets served. Rental related services revenues increased 13% to $7.2 million, with gross profit on rental related services increasing 52%, to $1.8 million. Selling and administrative expenses increased 13% to $7.1 million primarily due to higher allocated corporate expenses and higher employee salaries and benefit costs.

financial outlook:

 

Based upon the Company’s year-to-date results and current outlook for the remainder of the year, the Company is raising its financial outlook. For the full-year 2022, the Company expects:

 

 

 

Previous

Current

Total revenue:

$695 to $720 million

$720 to $735 million

Adjusted EBITDA1, 2:

$266 to $276 million

$274 to $280 million

Gross rental equipment capital expenditures:

$145 to $155 million

$168 to $174 million

 

1.
Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs and share-based compensation. A reconciliation of actual net income to Adjusted EBITDA and Adjusted EBITDA to net cash provided by operating activities can be found at the end of this release.
2.
Information reconciling forward-looking Adjusted EBITDA to the comparable GAAP financial measures is unavailable to the Company without unreasonable effort because certain items required for such reconciliations are outside of the Company’s control and/or cannot be reasonably predicted, such as the provision for income taxes. Therefore, no reconciliation to the most comparable GAAP measures is provided. The Company provides Adjusted EBITDA guidance because it believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP, provides useful information for the reasons noted in the reconciliation of actual Adjusted EBITDA to the most directly comparable GAAP measures at the end of this release.

 

 

2


 

ABOUT MCGRATH:

McGrath RentCorp (Nasdaq: MGRC) is a leading business-to-business rental company in North America with a strong record of profitable business growth. Founded in 1979, McGrath’s operations are centered on modular solutions through its Mobile Modular and Mobile Modular Portable Storage businesses. In addition, its TRS-RenTelco business offers electronic test equipment rental solutions, and its Adler Tank Rentals business provides environmental containment solutions for hazardous and nonhazardous liquids and solids. The Company’s rental product offerings and services are part of the circular supply economy, helping customers work more efficiently, and sustainably manage their environmental footprint. With over 40 years of experience, McGrath’s success is driven by a focus on exceptional customer experiences. This focus has underpinned the Company’s long-term financial success and supported over 30 consecutive years of annual dividend increases to shareholders, a rare distinction among publicly listed companies.

Headquartered in Livermore, California. Additional information about McGrath and its businesses is available at mgrc.com and investors.mgrc.com.

You should read this press release in conjunction with the financial statements and notes thereto included in the Company’s latest Forms 10-K, 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, 10-Q and other SEC filings.

 

Conference Call Note:

As previously announced in its press release of September 29, 2022, McGrath RentCorp will host a conference call at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on October 27, 2022 to discuss the third quarter 2022 results. To participate in the teleconference, dial 1-800-245-3047 (in the U.S.), or 1-203-518-9765 (outside the U.S.), or to listen only, access the simultaneous webcast at the investor relations section of the Company’s website at https://investors.mgrc.com/. A replay will be available for 7 days following the call by dialing 1-800-839-6980 (in the U.S.), or 1-402-220-6062 (outside the U.S.). In addition, a live audio webcast and replay of the call may be found in the investor relations section of the Company’s website at https://investors.mgrc.com/events-and-presentations.

 

FORWARD-LOOKING STATEMENTS:

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, regarding McGrath RentCorp’s expectations, strategies, prospects or targets are forward looking statements. These forward-looking statements also can be identified by the use of forward-looking terminology such as “anticipates,” “believes,” “continues,” “could,” “estimates,” “expects,” “intends,” “may,” “plan,” “predict,” “project,” or “will,” or the negative of these terms or other comparable terminology. In particular, Mr. Hanna’s statements about healthy demand across each of our rental segments and the expectation of good momentum in the following quarter, as well as the statements regarding the full year 2022 in the “Financial Outlook” section, are forward-looking.

These forward-looking statements are not guarantees of future performance and involve significant risks and uncertainties that could cause our actual results to differ materially from those projected including: the duration of the COVID-19 pandemic and its economic impact, the extent and length of any restrictions associated with COVID-19 pandemic, the health of the education and commercial markets in our modular building division; the activity levels in the general purpose and communications test equipment markets at TRS-RenTelco; the utilization levels and rental rates of our Adler Tanks liquid and solid containment tank and box rental assets; continued execution of our strategic performance improvement initiatives; our ability to successfully increase prices to offset cost increases; and our ability to effectively manage our rental assets, as well as the factors disclosed under “Risk Factors” in the Company’s Form 10-K and other SEC filings.

Forward-looking statements are made only as of the date hereof. Except as otherwise required by law, we assume no obligation to update any of the forward-looking statements contained in this press release.

3


 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

(in thousands, except per share amounts)

 

2022

 

 

2021

 

 

2022

 

 

2021

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

118,361

 

 

$

103,269

 

 

$

333,226

 

 

$

283,937

 

 

Rental related services

 

 

35,361

 

 

 

31,513

 

 

 

88,497

 

 

 

73,870

 

 

Rental operations

 

 

153,722

 

 

 

134,782

 

 

 

421,723

 

 

 

357,807

 

 

Sales

 

 

45,391

 

 

 

37,636

 

 

 

97,738

 

 

 

80,503

 

 

Other

 

 

1,423

 

 

 

874

 

 

 

3,479

 

 

 

2,612

 

 

Total revenues

 

 

200,536

 

 

 

173,292

 

 

 

522,940

 

 

 

440,922

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

Depreciation of rental equipment

 

 

24,176

 

 

 

23,802

 

 

 

72,114

 

 

 

68,216

 

 

Rental related services

 

 

25,971

 

 

 

24,356

 

 

 

64,967

 

 

 

56,236

 

 

Other

 

 

31,708

 

 

 

24,711

 

 

 

92,356

 

 

 

67,696

 

 

Total direct costs of rental operations

 

 

81,855

 

 

 

72,869

 

 

 

229,437

 

 

 

192,148

 

 

Costs of sales

 

 

29,241

 

 

 

24,618

 

 

 

59,737

 

 

 

50,021

 

 

Total costs of revenues

 

 

111,096

 

 

 

97,487

 

 

 

289,174

 

 

 

242,169

 

 

Gross profit

 

 

89,440

 

 

 

75,805

 

 

 

233,766

 

 

 

198,753

 

 

Selling and administrative expenses

 

 

44,095

 

 

 

39,907

 

 

 

124,010

 

 

 

109,305

 

 

Income from operations

 

 

45,345

 

 

 

35,898

 

 

 

109,756

 

 

 

89,448

 

 

Other expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(4,177

)

 

 

(3,168

)

 

 

(9,998

)

 

 

(7,208

)

 

Foreign currency exchange loss

 

 

(236

)

 

 

(128

)

 

 

(404

)

 

 

(185

)

 

Income before provision for income taxes

 

 

40,932

 

 

 

32,602

 

 

 

99,354

 

 

 

82,055

 

 

Provision for income taxes

 

 

10,365

 

 

 

9,350

 

 

 

23,857

 

 

 

20,797

 

 

Net income

 

$

30,567

 

 

$

23,252

 

 

$

75,497

 

 

$

61,258

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

1.25

 

 

$

0.96

 

 

$

3.10

 

 

$

2.53

 

 

Diluted

 

$

1.25

 

 

$

0.95

 

 

$

3.08

 

 

$

2.50

 

 

Shares used in per share calculation:

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

24,379

 

 

 

24,245

 

 

 

24,342

 

 

 

24,209

 

 

Diluted

 

 

24,504

 

 

 

24,507

 

 

 

24,516

 

 

 

24,506

 

 

Cash dividends declared per share

 

$

0.455

 

 

$

0.435

 

 

$

1.365

 

 

$

1.305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

4


 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 

 

September 30,

 

 

December 31,

 

(in thousands)

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Cash

 

$

1,561

 

 

$

1,491

 

Accounts receivable, net of allowance for credit losses of $2,125 in 2022
   and 2021

 

 

189,959

 

 

 

159,499

 

Rental equipment, at cost:

 

 

 

 

 

 

Relocatable modular buildings

 

 

1,085,060

 

 

 

1,040,094

 

Electronic test equipment

 

 

396,068

 

 

 

361,391

 

Liquid and solid containment tanks and boxes

 

 

309,607

 

 

 

309,908

 

 

 

 

1,790,735

 

 

 

1,711,393

 

Less: accumulated depreciation

 

 

(690,913

)

 

 

(646,169

)

Rental equipment, net

 

 

1,099,822

 

 

 

1,065,224

 

Property, plant and equipment, net

 

 

139,203

 

 

 

135,325

 

Prepaid expenses and other assets

 

 

72,258

 

 

 

54,945

 

Intangible assets, net

 

 

42,607

 

 

 

47,049

 

Goodwill

 

 

132,305

 

 

 

132,393

 

Total assets

 

$

1,677,715

 

 

$

1,595,926

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Liabilities:

 

 

 

 

 

 

Notes payable

 

$

419,464

 

 

$

426,451

 

Accounts payable and accrued liabilities

 

 

154,942

 

 

 

136,313

 

Deferred income

 

 

92,115

 

 

 

58,716

 

Deferred income taxes, net

 

 

238,126

 

 

 

242,425

 

Total liabilities

 

 

904,647

 

 

 

863,905

 

Shareholders’ equity:

 

 

 

 

 

 

Common stock, no par value - Authorized 40,000 shares

 

 

 

 

 

 

Issued and outstanding - 24,382 shares as of September 30, 2022 and 24,260 shares as of December 31, 2021

 

 

107,463

 

 

 

108,610

 

Retained earnings

 

 

665,530

 

 

 

623,465

 

Accumulated other comprehensive income (loss)

 

 

75

 

 

 

(54

)

Total shareholders’ equity

 

 

773,068

 

 

 

732,021

 

Total liabilities and shareholders’ equity

 

$

1,677,715

 

 

$

1,595,926

 

 

 

 

 

 

 

 

 

 

5


 

MCGRATH RENTCORP

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 

 

 

Nine Months Ended September 30,

 

(in thousands)

 

2022

 

 

2021

 

Cash Flows from Operating Activities:

 

 

 

 

 

 

Net income

 

$

75,497

 

 

$

61,258

 

Adjustments to reconcile net income to net cash provided by
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

83,272

 

 

 

79,047

 

Deferred income taxes

 

 

(4,299

)

 

 

15,403

 

Provision for doubtful accounts

 

 

307

 

 

 

193

 

Share-based compensation

 

 

5,106

 

 

 

5,302

 

Gain on sale of used rental equipment

 

 

(26,705

)

 

 

(17,788

)

Foreign currency exchange loss

 

 

404

 

 

 

185

 

Amortization of debt issuance costs

 

 

13

 

 

 

11

 

Change in:

 

 

 

 

 

 

Accounts receivable

 

 

(30,767

)

 

 

(33,471

)

Prepaid expenses and other assets

 

 

(17,313

)

 

 

(11,409

)

Accounts payable and accrued liabilities

 

 

14,384

 

 

 

17,428

 

Deferred income

 

 

33,399

 

 

 

20,128

 

Net cash provided by operating activities

 

 

133,298

 

 

 

136,287

 

Cash Flows from Investing Activities:

 

 

 

 

 

 

Purchases of rental equipment

 

 

(130,395

)

 

 

(90,379

)

Purchases of property, plant and equipment

 

 

(10,594

)

 

 

(969

)

Cash paid for acquisition of businesses

 

 

 

 

 

(285,624

)

Proceeds from sales of used rental equipment

 

 

54,193

 

 

 

41,556

 

Net cash used in investing activities

 

 

(86,796

)

 

 

(335,416

)

Cash Flows from Financing Activities:

 

 

 

 

 

 

Net (payments) borrowings under bank lines of credit

 

 

(7,000

)

 

 

176,758

 

Borrowings under note purchase agreement

 

 

 

 

 

100,000

 

Principal payment of Series B senior notes

 

 

 

 

 

(40,000

)

Taxes paid related to net share settlement of stock awards

 

 

(6,253

)

 

 

(4,847

)

Payment of dividends

 

 

(33,175

)

 

 

(31,635

)

Net cash (used in) provided by financing activities

 

 

(46,428

)

 

 

200,276

 

Effect of foreign currency exchange rate changes on cash

 

 

(4

)

 

 

(5

)

Net increase in cash

 

 

70

 

 

 

1,142

 

Cash balance, beginning of period

 

 

1,491

 

 

 

1,238

 

Cash balance, end of period

 

$

1,561

 

 

$

2,380

 

Supplemental Disclosure of Cash Flow Information:

 

 

 

 

 

 

Interest paid, during the period

 

$

8,982

 

 

$

6,477

 

Net income taxes paid, during the period

 

$

24,885

 

 

$

8,074

 

Dividends accrued during the period, not yet paid

 

$

11,167

 

 

$

10,002

 

Rental equipment acquisitions, not yet paid

 

$

9,555

 

 

$

2,199

 

 

 

 

 

 

 

 

 

 

 

 

 

6


 

MCGRATH RENTCORP

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

BUSINESS SEGMENT DATA (unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended September 30, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(dollar amounts in thousands)

 

Mobile Modular

 

 

TRS-RenTelco

 

 

Adler Tanks

 

 

Enviroplex

 

 

Consolidated

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

$

69,111

 

 

$

31,760

 

 

$

17,490

 

 

$

 

 

$

118,361

 

Rental related services

 

 

27,353

 

 

 

845

 

 

 

7,163

 

 

 

 

 

 

35,361

 

    Rental operations

 

 

96,464

 

 

 

32,605

 

 

 

24,653

 

 

 

 

 

 

153,722

 

Sales

 

 

28,922

 

 

 

5,514

 

 

 

977

 

 

 

9,978

 

 

 

45,391

 

Other

 

 

452

 

 

 

408

 

 

 

563

 

 

 

 

 

 

1,423

 

        Total revenues

 

 

125,838

 

 

 

38,527

 

 

 

26,193

 

 

 

9,978

 

 

 

200,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Costs and Expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Direct costs of rental operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Depreciation

 

 

7,747

 

 

 

12,427

 

 

 

4,002

 

 

 

 

 

 

24,176

 

    Rental related services

 

 

19,973

 

 

 

603

 

 

 

5,395

 

 

 

 

 

 

25,971

 

    Other

 

 

22,837

 

 

 

5,366

 

 

 

3,505

 

 

 

 

 

 

31,708

 

        Total direct costs of rental operations

 

 

50,557

 

 

 

18,396

 

 

 

12,902

 

 

 

 

 

 

81,855

 

Costs of sales

 

 

18,696

 

 

 

2,133

 

 

 

693

 

 

 

7,719

 

 

 

29,241

 

        Total costs of revenues

 

 

69,253

 

 

 

20,529

 

 

 

13,595

 

 

 

7,719

 

 

 

111,096

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Profit

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rental

 

 

38,527

 

 

 

13,967

 

 

 

9,983

 

 

 

 

 

 

62,477

 

Rental related services

 

 

7,380

 

 

 

242

 

 

 

1,768

 

 

 

 

 

 

9,390

 

    Rental operations

 

 

45,907

 

 

 

14,209

 

 

 

11,751

 

 

 

 

 

 

71,867

 

Sales

 

 

10,226

 

 

 

3,381

 

 

 

284

 

 

 

2,259

 

 

 

16,150

 

Other

 

 

452

 

 

 

408

 

 

 

563

 

 

 

 

 

 

1,423

 

          Total gross profit

 

 

56,585

 

 

 

17,998

 

 

 

12,598

 

 

 

2,259

 

 

 

89,440

 

Selling and administrative expenses

 

 

28,798

 

 

 

6,726

 

 

 

7,141

 

 

 

1,430

 

 

 

44,095

 

Income from operations

 

$

27,787

 

 

$

11,272

 

 

$

5,457

 

 

$

829

 

 

 

45,345

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,177

)

Foreign currency exchange loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(236

)

Provision for income taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,365

)

          Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

$

30,567

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA 1

 

$

39,734

 

 

$

23,894

 

 

$

10,192

 

 

$

900

 

 

$

74,720

 

Average rental equipment 2

 

$

1,030,792

 

 

$

389,675

 

 

$

307,153

 

 

 

 

 

 

 

Average monthly total yield 3

 

 

2.23

%

 

 

2.71

%

 

 

1.90

%

 

 

 

 

 

 

Average utilization 4

 

 

80.1

%

 

 

65.3

%

 

 

54.9

%

 

 

 

 

 

 

Average monthly rental rate 5

 

 

2.79

%

 

 

4.16

%

 

 

3.46

%

 

 

 

 

 

 

 

1. Adjusted EBITDA is defined as net income before interest expense, provision for income taxes, depreciation, amortization, non-cash impairment costs and share-based compensation.

2. Average rental equipment represents the cost of rental equipment, excluding accessory equipment. For Mobile Modular and Adler Tanks, Average rental equipment also excludes new equipment inventory.

3. Average monthly total yield is calculated by dividing the averages of monthly rental revenues by the cost of rental equipment for the period.

4. Average utilization is calculated by dividing the average month end costs of rental equipment on rent by the average month end total costs of rental equipment.

5. 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.

 

 

 

 

 

7


 

MCGRATH RENTCORP