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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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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): February 23, 2006
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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)
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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 February 23, 2006, McGrath RentCorp (the "Company") announced via press
release the Company's results for its fourth quarter ended December 31, 2005. 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
February 23, 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: February 23, 2006 By: /s/ Thomas J. Sauer
-----------------------------------
Thomas J. Sauer
Vice President and Chief Financial Officer
3
Exhibit 99.1
McGrath RentCorp Announces Results for Fourth Quarter and Year-end;
EPS Increases 33% to $1.61 for the Year;
Company Announces 14% Dividend Increase
LIVERMORE, Calif.--(BUSINESS WIRE)--Feb. 23, 2006--McGrath
RentCorp (Nasdaq:MGRC) today announced revenues for the quarter ended
December 31, 2005, of $77.6 million, compared to $59.3 million in
fourth quarter 2004. The Company reported net income for the fourth
quarter 2005 of $12.1 million, or $0.47 per diluted share, compared to
$8.8 million, or $0.35 per diluted share, in the fourth quarter 2004.
Total revenues for the twelve months ended December 31, 2005, were
$272.2 million, compared to $202.5 million in the same twelve-month
period in 2004. Net income for the twelve months ended December 31,
2005, increased 36% to $40.8 million, or $1.61 per diluted share,
compared to net income of $30.0 million, or $1.21 per diluted share,
in the prior-year period.
The Company also announced that the board of directors declared a
quarterly cash dividend of $0.16 per share for the quarter ending
March 31, 2006, an increase of 14% over last year's same period. On an
annualized basis, this dividend represents a 2.0% yield based on the
February 22, 2006, closing stock price. The cash dividend will be
payable on April 28, 2006, to all shareholders of record on April 14,
2006.
For the fourth quarter of 2005, the Company's Mobile Modular
division reported an increase in total revenues of 43% from $30.7
million in fourth quarter 2004 to $43.8 million in fourth quarter
2005, with both rental and sales revenues improving on the continued
strength in the educational market. Modular sales revenues for the
quarter of $14.4 million included $8.4 million of sales revenues
related to hurricane damages in the southeastern U.S. in 2005. The
Company views these types of large sale projects as unique
opportunities and generally would not expect sale projects of a
similar size to occur on a regular basis. Mobile Modular's increase in
revenues led to a 37% increase in its pre-tax income to $13.4 million.
Looking forward, Mobile Modular does not anticipate additional 2005
hurricane-related rental or sale opportunities of any significance.
For the Company's TRS-RenTelco division, fourth quarter 2005 rental
revenues increased 1% to $18.6 million from $18.5 million in the prior
year's same quarter, and gross profit on rents increased to $8.0
million from $6.6 million a year ago primarily due to lower
depreciation expense, contributing to the quarter's pre-tax income
increase to $5.5 million from $3.9 million in 2004.
Dennis Kakures, President and CEO of McGrath RentCorp, made the
following comments regarding these results and future expectations:
"Our favorable fourth quarter results were led by another solid
year for Mobile Modular and the improving health and profitability of
our test equipment business. Our long-term success has been and will
continue to be driven by rental revenue growth and improved gross
profit on rents. We believe these metrics provide the best gauge of
the health and sustainable earnings potential of both Mobile Modular
and TRS-RenTelco.
"Our success in 2005 was driven by both of our core rental
businesses, contributing to a combined 27% annual rental revenue
increase to $152.3 million. Mobile Modular rental revenues increased
14% to $81.2 million, which includes our first full-year of Florida
rental operations, with gross profit on rents increasing 15% to $51.8
million. TRS-RenTelco rental revenues increased 45% to $71.1 million,
primarily as a result of the TRS acquisition in 2004, with gross
profit on rents increasing 43% to $27.1 million.
"Mobile Modular continued to benefit in 2005 from the recurring
rental stream from educational facility rentals in the geographic
markets we serve. California had another favorable year in rental
revenue growth despite an increased level of classroom returns during
the third and fourth quarters related to the completion of a number of
modernization projects. In Florida, we continued to make strong
progress in growing our customer base of public school districts.
Additionally, our Florida hybrid classroom continues to gain
popularity in the market place. In Texas, we benefited from both an
increased level of classroom rental activity as well as from rentals
related to the impact of various hurricanes.
"At TRS-RenTelco, although fourth quarter rental revenues were
only up slightly compared to a year ago, we managed to increase gross
profit on rents by $1.4 million or 22% chiefly through lower
depreciation expense and to a lesser degree continuing to improve the
cost-effectiveness of our operations. Depreciation expense as a
percentage of rents was 44.6% in the fourth quarter of 2005, as
compared to 51.5% in the fourth quarter of 2004. The significant
decrease in depreciation expense was attributable to the extension of
useful life of two test equipment models in the second quarter of
2005, the impact of selling underutilized equipment through more
effective management of our rental inventory at the model number
level, and rental equipment becoming fully depreciated.
"In addition to our favorable rental operations results in 2005,
we benefited from unique sales of modular classrooms related to
hurricanes in the southeastern U.S., which contributed $0.09 in EPS
for the year. We also benefited from a lower effective tax rate in
2005 compared to 2004 as a result of a cumulative deferred tax
adjustment for the state income tax accrual rate resulting from our
first full-year of TRS operations following the acquisition, which
added $0.03 in EPS for the year.
"In late 2005, we began an important initiative and investment in
our future by upgrading our operating and financial software
applications. We believe this investment will benefit us in the years
to come by creating information system platforms that provide us the
scalability necessary for increased business levels in growing McGrath
RentCorp. At this time, we expect this project to be completed in late
2007.
"For Mobile Modular in 2006, we are uncertain at this time as to
the level of new modernization work that will be commenced. This is a
function of the current amount of unallocated and unreleased state
funds for modernization from the prior state-wide bond measure, the
backlog of applications awaiting funding and the actual commencement
of projects. For modernization work beyond 2006, we are increasingly
optimistic that a state-wide facilities bond measure in California
with significant monies for modernization projects will be placed on
the ballot in late 2006. We believe that this bond measure, if passed,
along with the success of local bond measures passed in November 2005,
should provide monies to support favorable levels of new modernization
projects in both 2007 and 2008. Keep in mind, assuming favorable new
business levels, compared to future returning equipment, we would
expect that it will take at least a few quarters to raise utilization
levels of the California classroom rental fleet, as the majority of
classroom equipment typically begins to ship late in the second
quarter and in the third quarter annually. For Florida, we are well
positioned to continue to grow our business levels. We anticipate that
we will continue to benefit from student enrollment growth, class size
reduction, the phasing out of older coded modular classrooms and
broader market acceptance of our hybrid classroom product. Also in
2006, we will begin to develop our Florida property for a regional
sales and inventory center to support our growth.
"For TRS-RenTelco in 2006, we are anticipating healthier U.S. and
Canadian rental markets. Additionally, we should continue to benefit
from cost-effectiveness improvement efforts to our operations.
Internationally, we will continue the work started in late 2005 on
evaluating strategic development opportunities in selective markets in
which we are either currently doing business or are considering
entering.
"Looking forward to 2006, although we are projecting favorable
top-line rental revenue growth for both modulars and electronics, our
full-year earnings per share guidance is in a range of $1.50 to $1.60
per share. It is important to understand the year to year differences
by bridging our actual results for 2005 of $1.61 per share to our 2006
guidance range of $1.50 to $1.60 per share. In 2006, although we
expect improved rental operation results, we don't expect any
significant sales like those in 2005 related to hurricane damages in
the southeastern U.S., which added $0.09 per share. Further, we expect
EPS in 2006 to be reduced by $0.09 per share for the estimated impact
of stock option expensing required under FAS 123R beginning January 1,
2006 and by $0.04 per share due to a higher estimated effective tax
rate of 39.0% compared to 37.5% in 2005, based on the expected 2006
revenue distribution by state.
"In summary, I am very pleased with our 2005 results and I believe
2006 will continue to show favorable performance from our core rental
operations. Looking ahead, our strategic planning process for
evaluating both organic and acquisition opportunities for growth is
fully engaged. We are actively assessing our next strategic growth
opportunities and preparing our information systems and operating
processes to support a growing McGrath RentCorp in the years ahead."
FOURTH QUARTER 2005 HIGHLIGHTS (AS COMPARED TO FOURTH QUARTER
2004)
-- Rental revenues increased 7% to $40.3 million. Within rental
revenues, Mobile Modular increased 13% from $19.1 million to
$21.7 million; TRS-RenTelco increased 1% from $18.5 million to
$18.6 million, and improved sequentially from the third
quarter 2005 level of $18.4 million.
-- Sales revenues increased 96% to $28.7 million, resulting
primarily from Mobile Modular's increased sales volume, which
included $8.4 million of sales revenues related to damages
caused by the recent hurricanes. Higher sales volume combined
with a lower gross margin percentage, 22.7% in 2005 compared
to 29.1% in 2004, resulted in a gross profit increase of $2.3
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 decreased 5% to $11.1
million, with Mobile Modular increasing 28% to $2.8 million
from $2.2 million in 2004, and TRS-RenTelco decreasing 13% to
$8.3 million from $9.5 million in 2004. The TRS-RenTelco
decrease was due to the determination in April 2005 to extend
the useful lives on two models of test equipment (quarterly
impact of $0.6 million), the selling of underutilized
equipment and rental equipment becoming fully depreciated,
offset by new equipment purchases.
-- Debt increased $8.6 million during the quarter to $163.2
million, with the Company's total liabilities to equity ratio
decreasing from 1.80 to 1 at September 30, 2005 to 1.73 to 1
as of December 31, 2005. As of December 31, 2005, the Company,
under its lines of credit, had capacity to borrow an
additional $91.8 million.
-- Dividend rate increased 27% to $0.14 per share for the fourth
quarter 2005, as compared to $0.11 per share for the fourth
quarter of 2004. On an annualized basis, this dividend
represents a 1.7% yield on the February 22, 2006 close price
of $32.25.
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 expects favorable rental revenue growth for both
modulars and electronics in 2006, with full-year earnings per share to
be in a range of $1.50 to $1.60 per diluted share. In 2006, although
we expect improved rental operation results, we don't expect any
significant sales like those in 2005 related to hurricane damages in
the southeastern U.S., which added $0.09 per share. Further, we expect
diluted earnings per share in 2006 to be reduced by $0.09 per share
for the estimated impact of stock option expensing required under the
adoption of Statement of Financial Standards No. 123R, "Share Based
Payment," beginning January 1, 2006 and by $0.04 per share due to a
higher estimated effective tax rate of 39.0%, compared to 37.5% in
2005, based on the expected 2006 revenue distribution by state. Such a
forward-looking statement reflects McGrath RentCorp's expectations as
of February 23, 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 January 26, 2006, McGrath RentCorp will host a conference call at
5:00 p.m. Eastern Time (2:00 p.m. Pacific Time) on February 23, 2006
to discuss the fourth quarter 2006 results. To participate in the
teleconference, dial 1-800-218-0204 (in the U.S.), or 1-303-262-2143
(outside the U.S.), 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 11050313.
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
expectation that our long-term success will continue to be driven by
rental revenue growth and improved gross profit on rents, our
expectation that our investment in upgrading our operating and
financial software applications will benefit us, our expectation that
the California state-wide facilities bond measure, if passed in 2006,
along with the local school bond measures passed in November 2005
would provide monies to support favorable levels of new modernization
projects in California, our expectation regarding raising utilization
levels of the California classroom rental fleet assuming favorable
business levels, compared to future returning equipment, our
expectation that we are positioned to continue to grow our business
levels in Florida, and in particular, our expectation that in the
Florida market we will benefit from student enrollment growth, class
size reduction, the phasing out of older modular classrooms and the
broader market acceptance of our hybrid classroom product, our
expectation of healthier U.S. and Canadian rental markets in 2006 for
TRS-RenTelco, our expectation that internationally we will continue
evaluating strategic opportunities in selective markets, our
expectation regarding the annual dividend yield, our expectation
regarding the 2006 effective tax rate, our expectation regarding the
2006 revenue distribution by state, and our 2006 full-year earnings
per share guidance, including our expectations for impacts on our 2006
earnings per share resulting from expected stock option expenses
relating to adoption of FASB 123(R), our expectations regarding
significant sales like those in 2005 related to hurricane damages in
the southeastern U.S., and expected increases in earnings per share
from improved rental operations results. 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. These factors include the effectiveness of
management's strategies and decisions, general economic and business
conditions, 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, changing prices and market
conditions. 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)
(in thousands, except per share amounts)
- ----------------------------------------------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
-------------------- -------------------
2005 2004 2005 2004
- -------------------------------------- --------- --------- ---------
REVENUES
- --------
Rental $40,316 $37,662 $152,316 $120,358
Rental Related Services 8,021 6,389 26,460 23,347
--------- --------- --------- ---------
Rental Operations 48,337 44,051 178,776 143,705
Sales 28,730 14,673 90,823 57,162
Other 548 588 2,581 1,653
--------- --------- --------- ---------
Total Revenues 77,615 59,312 272,180 202,520
--------- --------- --------- ---------
COSTS AND EXPENSES
- ------------------
Direct Costs of Rental
Operations
Depreciation of Rental
Equipment 11,088 11,701 44,178 32,426
Rental Related Services 5,687 4,926 17,893 15,172
Other 7,230 6,793 29,292 24,007
--------- --------- --------- ---------
Total Direct Costs
of Rental
Operations 24,005 23,420 91,363 71,605
Costs of Sales 22,203 10,405 67,378 43,134
--------- --------- --------- ---------
Total Costs 46,208 33,825 158,741 114,739
--------- --------- --------- ---------
Gross Profit 31,407 25,487 113,439 87,781
Selling and Administrative 10,295 10,411 39,819 33,705
--------- --------- --------- ---------
Income from Operations 21,112 15,076 73,620 54,076
Interest 2,164 1,664 7,890 5,188
--------- --------- --------- ---------
Income Before Provision
for Income Taxes 18,948 13,412 65,730 48,888
Provision for Income Taxes 6,872 4,688 24,649 18,843
--------- --------- --------- ---------
Income Before Minority
Interest 12,076 8,724 41,081 30,045
Minority Interest in
Income of Subsidiary (29) (34) 262 48
Net Income $12,105 $ 8,758 $ 40,819 $ 29,997
========= ========= ========= =========
Earnings Per Share:
Basic $ 0.49 $ 0.36 $ 1.65 $ 1.23
Diluted $ 0.47 $ 0.35 $ 1.61 $ 1.21
Shares Used in Per Share
Calculation:
Basic 24,795 24,464 24,668 24,344
Diluted 25,542 25,020 25,331 24,804
MCGRATH RENTCORP
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
- ----------------------------------------------------------------------
December 31,
-------------------
(in thousands) 2005 2004
- ----------------------------------------------------------------------
Assets
- ------
Cash $ 276 $ 189
Accounts Receivable, net of allowance for
doubtful accounts of $1,000 in 2005 and $900
in 2004 63,702 53,846
Rental Equipment, at cost:
Relocatable Modular Buildings 408,227 339,537
Electronic Test Instruments 154,708 149,437
---------- -----------
562,935 488,974
Less Accumulated Depreciation (156,502) (131,186)
---------- -----------
Rental Equipment, net 406,433 357,788
---------- -----------
Property, Plant and Equipment, net 56,008 47,750
Prepaid Expenses and Other Assets 16,019 14,707
---------- -----------
Total Assets $542,438 $474,280
========== ===========
Liabilities and Shareholders' Equity
- ------------------------------------
Liabilities:
Notes Payable $163,232 $151,888
Accounts Payable and Accrued Liabilities 51,690 39,460
Deferred Income 27,410 24,377
Minority Interest in Subsidiary 3,199 2,937
Deferred Income Taxes, net 98,438 88,730
---------- -----------
Total Liabilities 343,969 307,392
---------- -----------
Shareholders' Equity:
Common Stock, no par value --
Authorized -- 40,000 shares
Issued and Outstanding -- 24,832 shares in
2005 and 24,543 shares in 2004 26,224 21,586
Retained Earnings 172,245 145,302
---------- -----------
Total Shareholders' Equity 198,469 166,888
---------- -----------
Total Liabilities and Shareholders'
Equity $542,438 $474,280
========== ===========
MCGRATH RENTCORP
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
- ----------------------------------------------------------------------
Year Ended December 31,
------------------------
(in thousands) 2005 2004
- ----------------------------------------------------------------------
Cash Flow from Operating Activities:
Net Income $40,819 $29,997
Adjustments to Reconcile Net Income to
Net Cash
Provided by Operating Activities:
Depreciation 46,433 34,501
Provision for Doubtful Accounts 845 303
Noncash Compensation 44 57
Gain on Sale of Rental Equipment (9,662) (8,532)
Change In:
Accounts Receivable (10,701) (8,370)
Prepaid Expenses and Other Assets (1,312) (2,348)
Accounts Payable and Accrued
Liabilities 2,646 6,231
Deferred Income 3,033 761
Deferred Income Taxes 9,708 9,672
--------- ---------
Net Cash Provided by Operating
Activities 81,853 62,272
--------- ---------
Cash Flow from Investing Activities:
Acquisition of TRS -- (120,209)
Purchase of Rental Equipment (105,501) (65,706)
Purchase of Property, Plant and Equipment (10,512) (1,347)
Proceeds from Sale of Rental Equipment 31,406 27,422
--------- ---------
Net Cash Used in Investing Activities (84,607) (159,840)
--------- ---------
Cash Flow from Financing Activities:
Net Borrowings (Repayments) Under Bank
Lines of Credit 11,344 44,622
Borrowings Under Private Placement -- 60,000
Proceeds from the Exercise of Stock
Options, net 4,595 3,630
Repurchase of Common Stock (30) (40)
Payment of Dividends (13,068) (10,459)
--------- ---------
Net Cash Provided By Financing
Activities 2,841 97,753
--------- ---------
Net Increase in Cash 87 185
Cash Balance, beginning of period 189 4
--------- ---------
Cash Balance, end of period $276 $189
========= =========
Interest Paid, during the period $7,799 $5,518
========= =========
Income Taxes Paid, during the period $22,871 $8,355
========= =========
Dividends Declared, not yet paid $3,479 $2,700
========= =========
Rental Equipment Acquisitions, not yet paid $14,694 $5,625
========= =========
Mobile Modular Segment - Three Months 2005 compared to Three Months
2004 (Unaudited)
- ----------------------------------------------------------------------
(dollar amounts in thousands) Three Months Ended 2005 over 2004
---------------
12/31/2005 12/31/2004 $ %
-----------------------------------------
Revenues
- --------
Rental Revenues $21,682 $19,146 $2,536 13%
Rental Related Services 7,604 5,903 1,701 29%
--------------------------------
Rental Operations 29,286 25,049 4,237 17%
Sales 14,377 5,573 8,804 158%
Other 162 107 55 51%
--------------------------------
Total Revenues 43,825 30,729 13,096 43%
--------------------------------
Gross Profit
- ------------
Rental Revenues 13,963 12,576 1,387 11%
Rental Related Services 2,240 1,287 953 74%
--------------------------------
Rental Operations 16,203 13,863 2,340 17%
Sales 3,793 1,558 2,235 143%
Other 162 107 55 51%
--------------------------------
Total Gross Profit 20,158 15,528 4,630 30%
--------------------------------
--------------------------------
Pretax Income $13,393 $9,761 $3,632 37%
--------------------------------
Other Information
- -----------------
Depreciation of Rental
Equipment $2,773 $2,173 $600 28%
Interest Expense Allocation 1,590 1,145 445 39%
Average Rental Equipment (1) 363,768 317,667 46,101 15%
Average Rental Equipment on
Rent (1) 305,008 274,168 30,840 11%
Average Monthly Total Yield
(2) 1.99% 2.01% -1%
Average Utilization (3) 83.8% 86.3% -3%
Average Monthly Rental Rate
(4) 2.37% 2.33% 2%
Period End Rental Equipment
(1) $366,253 $321,203 $45,050 14%
Period End Utilization (3) 83.5% 86.1% -3%
1 Average and period end rental equipment represents the cost of
rental equipment excluding new equipment inventory and 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 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 Segment - Three Months 2005 compared to Three Months
2004 (Unaudited)
- ----------------------------------------------------------------------
(dollar amounts in thousands) Three Months Ended 2005 over2004
---------------
12/31/2005 12/31/2004 $ %
------------------------------------------
Revenues
- --------
Rental Revenues $18,634 $18,516 $118 1%
Rental Related Services 417 486 (69) -14%
---------------------------------
Rental Operations 19,051 19,002 49 --
Sales 12,128 7,695 4,433 58%
Other 386 481 (95) -20%
---------------------------------
Total Revenues $31,565 $27,178 $4,387 16%
---------------------------------
Gross Profit
- ------------
Rental Revenues $8,035 $6,592 $1,443 22%
Rental Related Services 94 176 (82) -47%
---------------------------------
Rental Operations 8,129 6,768 1,361 20%
Sales 2,277 2,392 (115) -5%
Other 386 481 (95) -20%
---------------------------------
Total Gross Profit $10,792 $9,641 $1,151 12%
---------------------------------
---------------------------------
Pretax Income $5,490 $3,887 $1,603 41%
---------------------------------
Other Information
- -----------------
Depreciation of Rental
Equipment $8,315 $9,528 $(1,213) -13%
Interest Expense Allocation 665 578 87 15%
Average Rental Equipment (1) 153,094 147,408 5,686 4%
Average Rental Equipment on
Rent (1) 108,007 94,239 13,768 15%
Average Monthly Total Yield
(2) 4.06% 4.19% -3%
Average Utilization (3) 70.5% 63.9% 10%
Average Monthly Rental Rate
(4) 5.75% 6.55% -12%
Period End Rental Equipment
(1) $154,119 $148,014 $6,105 4%
Period End Utilization (3) 68.9% 61.6% 12%
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 Segment - Twelve Months 2005 compared to Twelve Months
2004 (Unaudited)
- ----------------------------------------------------------------------
(dollar amounts in thousands) Twelve Months Ended 2005 over 2004
----------------
12/31/2005 12/31/2004 $ %
------------------------------------------
Revenues
- --------
Rental Revenues $81,180 $71,460 $9,720 14%
Rental Related Services 25,053 22,142 2,911 13%
---------------------------------
Rental Operations 106,233 93,602 12,631 13%
Sales 49,107 27,617 21,490 78%
Other 625 444 181 41%
---------------------------------
Total Revenues 155,965 121,663 34,302 28%
---------------------------------
Gross Profit
- ------------
Rental Revenues 51,756 45,002 6,754 15%
Rental Related Services 8,259 7,751 508 7%
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Rental Operations 60,015 52,753 7,262 14%
Sales 12,100 6,615 5,485 83%
Other 625 444 181 41%
---------------------------------
Total Gross Profit 72,740 59,812 12,928 22%
---------------------------------
---------------------------------
Pretax Income $46,794 $37,850 $8,944 24%
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Other Information
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Depreciation of Rental
Equipment 9,587 8,374 1,213 14%
Interest Expense Allocation 5,679 3,947 1,732 44%
Average Rental Equipment (1) $341,103 $303,294 $37,809 12%
Average Rental Equipment on
Rent (1) $289,584 $259,598 $29,986 12%
Average Monthly Total Yield
(2) 1.98% 1.96% 1%
Average Utilization (3) 84.9% 85.6% -1%
Average Monthly Rental Rate
(4) 2.34% 2.29% 2%
Period End Rental Equipment
(1) $366,253 $321,203 $45,050 14%
Period End Utilization (3) 83.5% 86.1% -3%
1 Average and period end rental equipment represents the cost of
rental equipment excluding new equipment inventory and 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 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 Segment - Twelve Months 2005 compared to Twelve Months
2004 (Unaudited)
- ----------------------------------------------------------------------
(dollar amounts in thousands) Twelve Months Ended 2005 over 2004
----------------
12/31/2005 12/31/2004 $ %
------------------------------------------
Revenues
- --------
Rental Revenues $71,136 $48,898 $22,238 45%
Rental Related Services 1,407 1,205 202 17%
---------------------------------
Rental Operations 72,543 50,103 22,440 45%
Sales 31,154 20,291 10,863 54%
Other 1,956 1,209 747 62%
---------------------------------
Total Revenues $105,653 $71,603 $34,050 48%
---------------------------------
Gross Profit
- ------------
Rental Revenues $27,090 $18,923 $8,167 43%
Rental Related Services 308 424 (116) -27%
---------------------------------
Rental Operations 27,398 19,347 8,051 42%
Sales 7,689 5,430 2,259 42%
Other 1,956 1,209 747 62%
---------------------------------
Total Gross Profit $37,043 $25,986 $11,057 43%
---------------------------------
---------------------------------
Pretax Income $17,211 $10,718 $6,493 61%
---------------------------------
Other Information
- -----------------
Depreciation of Rental
Equipment 34,591 24,052 10,539 44%
Interest Expense Allocation 2,475 1,412 1,063 75%
Average Rental Equipment (1) $151,087 $93,387 $57,700 62%
Average Rental Equipment on
Rent (1) $99,980 $57,608 $42,372 74%
Average Monthly Total Yield
(2) 3.92% 4.36% -10%
Average Utilization (3) 66.2% 61.7% 7%
Average Monthly Rental Rate
(4) 5.93% 7.07% -16%
Period End Rental Equipment
(1) $154,119 $148,014 $6,105 4%
Period End Utilization (3) 68.9% 61.6% 12%
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
Thomas J. Sauer, 925-606-9200