PHOENIX--(BUSINESS WIRE)--Jul. 26, 2018-- Mobile Mini, Inc. (NASDAQ GS: MINI) (the “Company” or “Mobile Mini”), the world’s leading supplier of portable storage solutions and a leading provider of tank and pump solutions in the United States, today reported actual and adjusted financial results for the quarter ended June 30, 2018. Total revenues were $142.0 million and rental revenues were $132.9 million, as compared to $126.7 million and $117.9 million, respectively, for the same period last year.

Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $105.8 million and $27.1 million, respectively, compared to $95.5 million and $22.4 million, respectively, for the same period last year.

The Company recorded net income of $15.0 million, or $0.33 per diluted share, in the second quarter of 2018, as compared to net income of $8.8 million, or $0.20 per diluted share, for the second quarter of 2017. On an adjusted basis, second quarter net income was $15.9 million, or $0.35 per diluted share, as compared to adjusted net income of $10.4 million, or $0.24 per diluted share, for the second quarter of 2017. Adjusted EBITDA was $50.0 million and adjusted EBITDA margin was 35.2% for the second quarter of 2018.

Dividend

The Company’s Board of Directors declared a cash dividend of 25.0 cents per share, which will be paid on August 29, 2018 to shareholders of record on August 15, 2018.

Second Quarter 2018 Highlights

• Continued strong rental revenue growth in Tank & Pump Solutions with a 21.2% year-over-year increase.
• Delivered robust Storage Solutions rental revenue year-over-year growth of 10.8%, 9.5% when adjusted for favorable currency fluctuations.
• Drove average original equipment cost utilization for Tank & Pump Solutions to 74.2% for the quarter, up 970 basis points compared to the prior-year quarter, with the most fleet on rent since the acquisition of this business in 2014.
• Increased total Storage Solutions average units on rent by 3.7% year-over-year, with average utilization of 70.6%, up 120 basis from the prior-year quarter.
• Raised Storage Solutions rental rates by 2.4% year-over-year, with rates on new rentals up 1.9%.
• Achieved adjusted EBITDA growth of 19.1%, compared to the prior-year quarter, 18.1% in constant currency.
• Generated strong net cash from operating activities of $35.0 million and free cash flow of $11.7 million.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “We continue to drive exceptional year-over-year rental revenue growth, achieving a very strong 12.8% increase during the second quarter. Our Tank & Pump Solutions business recorded the highest quarterly revenue since we acquired the business in 2014, with year-over-year organic growth exceeding 20%. We expect Tank & Pump Solutions to continue to deliver robust year-over-year growth for the remainder of this year as we gain traction on the new agreements signed in the fourth quarter of 2017 and first quarter of 2018. Our Storage Solutions segment also generated strong second quarter results, with year-over-year organic rental revenue growth of nearly 11%. The robust top-line growth of our consolidated business resulted in a 19.1% year-over-year increase in adjusted EBITDA.”

Mr. Olsson continued, “We believe that the end market demand for Tank & Pump has normalized and the current level of activity within this segment will continue. As we noted last quarter, we are uniquely positioned to drive growth in excess of the market amongst both large and small customers in this business. Our storage business is also very healthy and our pipeline looks robust. The current performance and pipeline reinforces our outlook for revenue increases in excess of our evergreen model, leading to continued strong increases in adjusted EBITDA and healthy free cash flow generation.”

Subsequent Event

Consistent with Mobile Mini’s strategy to focus on high returning assets and continuous improvements in efficiency, the Company engaged in an organization-wide project to assess the economic and operational status of its fleet and other assets as well as an in depth analysis of its fleet management process to identify inefficiencies. The task encompassed an intensive review of underperforming assets throughout North America and the United Kingdom using the Company’s recently implemented enterprise resource planning software and sophisticated work order system that allows specific identification of the status of each unit and facilitates deeper analysis of repair and maintenance costs. The review resulted in the identification of certain assets for which management determined it does not make economic sense to repair and retain.

In July 2018 management presented its proposed plan of sale for identified assets to the Board of Directors, and on July 24, the Board of Directors made the strategic decision to approve the plan and authorized management to begin actively marketing the assets for sale. As a result, the Company expects to place these assets as available for sale, mostly for scrap value, and to recognize a non-cash loss of $100 million in the third quarter of 2018, net of expected cash proceeds received.

The assets to be disposed of have not generated meaningful revenue over the last several years and therefore we do not believe that the asset disposal will affect the Company’s ability to generate revenue or to meet customer demand. Consequently, this project is not expected to affect the Company’s capital expenditures, nor will it negatively affect liquidity or free cash flow.

As a result of this project several yards will be exited, headcount will be reduced and other efficiencies have been identified. In total, when the changes have been fully implemented, the Company expects $5 million to $7 million in annual operational savings, along with approximately $4 million of reduced depreciation expense.

Conference Call

Mobile Mini will host a conference call today, Thursday, July 26 at 12 noon ET to review these results. To listen to the call live, dial (201) 493-6739 and ask for the Mobile Mini Conference Call or go to www.mobilemini.com and click on the Investors section. Additionally, a slide presentation that will accompany the call will be posted at www.mobilemini.com on the Investor Relations section and will be available in advance and after the call. Please go to the website 15 minutes early to download and install any necessary audio software. If you are unable to listen live, a replay of the call can be accessed for approximately 14 days after the call at Mobile Mini’s website.

About Mobile Mini, Inc.

Mobile Mini, Inc. is the world’s leading provider of portable storage solutions through its total rental fleet of approximately 216,200 storage solutions containers and office units and a leading provider of tank and pump solutions in the U.S., with a rental fleet of approximately 12,600 units. Mobile Mini’s network is comprised of 155 locations in the U.S., U.K., and Canada. Mobile Mini is included on the Russell 2000^® and 3000^® Indexes and the S&P Small Cap Index.

Forward-Looking Statements

This news release contains forward-looking statements, including, but not limited to, expected annual savings from the asset disposal, the continued growth of adjusted EBITDA, free cash flow, the level of activity of our Tank & Pump Solutions business, our ability to generate revenue or to meet customer demand and continue to have a healthy pipeline, all of which involve risks and uncertainties that could cause actual results to differ materially from those currently anticipated. Risks and uncertainties that may affect future results include those that are described from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). These forward-looking statements represent the judgment of the Company, as of the date of this release, and Mobile Mini disclaims any intent or obligation to update forward-looking statements.

(See accompanying tables)

Non-GAAP Financial Information
In addition to disclosing financial results that are determined in accordance with U.S. generally accepted accounting principles (“GAAP”), the Company also discloses in this press release certain non-GAAP financial information. These financial measures are not recognized measures under GAAP and they are not intended to be and should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. Adjusted net income, adjusted diluted earnings per share, EBITDA, adjusted EBITDA, EBITDA margin, adjusted EBITDA margin, free cash flow and constant currency financial information are non-GAAP financial measures as defined by SEC rules. This non-GAAP financial information may be determined or calculated differently by other companies. Reconciliations of these non-GAAP measurements to the most directly comparable GAAP financial measurements are furnished earlier in this release and as follows:

Adjusted net income and adjusted diluted earnings per share. Adjusted net income and related earnings per share information exclude certain transactions that management believes are not indicative of our business. We believe that the inclusion of this non-GAAP presentation makes it easier to compare our financial performance across reporting periods on a consistent basis.

EBITDA and adjusted EBITDA. EBITDA is defined as net income before discontinued operations, net of tax (if applicable), interest expense, income taxes, depreciation and amortization, and debt restructuring or extinguishment expense (if applicable), including any write-off of deferred financing costs. Adjusted EBITDA further excludes certain non-cash expenses, including share-based compensation, as well as transactions that management believes are not indicative of our business. Because EBITDA and adjusted EBITDA, as defined, exclude some but not all items that affect our cash flow from operating activities, they may not be comparable to similarly titled performance measures presented by other companies.

We present EBITDA and adjusted EBITDA because we believe they provide useful information regarding our ability to meet our future debt payment requirements, capital expenditures and working capital requirements and an overall evaluation of our financial condition. EBITDA and adjusted EBITDA have certain limitations as analytical tools and should not be used as substitutes for net income, cash flows from operations, or other consolidated income or cash flow data prepared in accordance with GAAP.

EBITDA and adjusted EBITDA margins are calculated as EBITDA and adjusted EBITDA, respectively, divided by total revenues expressed as a percentage.

Free Cash Flow. Free cash flow is defined as net cash provided by operating activities, minus or plus, net cash used in or provided by investing activities, excluding acquisitions and certain transactions. Free cash flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, the most directly comparable financial measure prepared in accordance with GAAP. We present free cash flow because we believe it provides useful information regarding our liquidity and ability to meet our short-term obligations. In particular, free cash flow indicates the amount of cash available after capital expenditures for, among other things, investments in our existing business, debt service obligations, payment of authorized quarterly dividends, repurchase of our common stock and strategic small acquisitions.

Constant Currency. We calculate the effect of currency fluctuations on current periods by translating the results for our business in the U.K. during the current period using the average exchange rates from the comparative period. We present constant currency information to provide useful information to assess our underlying business excluding the effect of material foreign currency rate fluctuations. Calculated in constant currency, our rental revenues and adjusted EBITDA for the three months ended June 30, 2018 were $1.2 million and $0.4 million lower than when calculated in accordance with GAAP.

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Source: Mobile Mini, Inc.

Mobile Mini, Inc.
Van Welch, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
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Kevin Towle, 212-836-9620