Press Release Details

Mobile Mini Reports Q4’15 Results and Announces 10% Increase in Quarterly Dividend

February 5, 2016 at 7:30 AM EST

PHOENIX, Ariz.--(BUSINESS WIRE)--Feb. 5, 2016-- 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 specialty containment solutions in the United States, today reported actual and adjusted financial results for the quarter ended December 31, 2015. Total revenues were $134.5 million and rental revenues were $126.5 million, up from $123.2 million and $113.4 million, respectively, for the same period last year.

The Company recorded net income of $9.5 million, or $0.21 per diluted share in the fourth quarter of 2015 as compared to net income of $12.9 million, or $0.28 per diluted share, for the fourth quarter of 2014. On an adjusted basis, fourth quarter net income was $18.4 million, or $0.41 per diluted share, compared to adjusted net income of $17.0 million, or $0.37 per diluted share, for the fourth quarter of 2014. During the fourth quarter, the Company recognized $16.0 million of restructuring expense related primarily to the integration and geographic expansion of ETS into the existing Mobile Mini footprint. The charges largely consist of non-cash fleet and property, plant and equipment abandonment costs. Adjusted EBITDA was $54.9 million and adjusted EBITDA margin was 40.9% for the fourth quarter of 2015.

Rental revenues for the portable storage and specialty containment businesses for the current quarter were $102.2 million and $24.3 million, respectively.

Dividend

The Company’s Board of Directors increased the Company’s first quarter 2016 cash dividend to 20.6 cents per share, a 10% increase as compared to the preceding period. The dividend will be paid on March 23, 2016 to shareholders of record on March 9, 2016.

Fourth Quarter 2015 Highlights

  • Increased portable storage rental revenues 5.2% year-over-year, excluding the wood mobile offices divested in May 2015, or 6.2% when adjusted for unfavorable currency fluctuations.
  • Increased portable storage rental rates by 2.8% year-over-year.
  • Expanded adjusted EBITDA margin to 40.9%, and delivered adjusted EBITDA of $54.9 million, up 12.0% from $49.0 million in the prior-year quarter.
  • Increased average portable storage utilization to 74.0%, compared to 73.3% in the prior-year when excluding wood mobile offices.
  • Delivered outstanding results in the U.K. with a 12.2% year-over-year increase in adjusted EBITDA to $8.8 million in the quarter, with a 40.0% margin.
  • Accomplished a $1.0 billion refinancing of our ABL Credit Agreement, extending the maturity to December 2020 and reducing interest rate borrowing margins.
  • Utilized strong free cash flow to return $14.4 million to our shareholders through $8.4 million in dividends and $6.0 million of repurchased treasury shares.

Full Year 2015 Highlights

  • Executed on our strategy to focus on high-return, low-maintenance assets by divesting the wood mobile office business and successfully integrating the ETS acquisition.
  • Achieved year-over-year portable storage rental rate increases of 4.5%.
  • Grew adjusted diluted earnings per share by 21.1% to $1.32.
  • Generated $73.6 million in free cash flow while reinvesting in the business with $57.9 million in net fleet capital expenditures in targeted areas of high demand.
  • Returned $95.5 million to our shareholders through $33.7 million in dividends and $61.8 million of repurchased treasury shares.

CEO Comments

Erik Olsson, Mobile Mini’s President and Chief Executive Officer, remarked, “I am very pleased with our performance and profitability in the quarter, including our adjusted EBITDA margin of 40.9%, a 110 basis point expansion compared to the prior-year quarter, despite short-term pressure related to the wood mobile office divestiture. We continued to generate momentum in the fourth quarter, with North American core activations up 7% year-over-year, and portable storage year-end units on rent up 4.3% over last year-end. Within our total portable storage business, we drove a 2.8% year-over-year rate increase, which together with an increase in units on rent, resulted in a healthy 6.2% increase in rental revenues, when adjusted for unfavorable currency exchange rates.”

Mr. Olsson continued, “Demand in our construction, industrial and diversified sectors remains strong, and we are well-situated to capitalize on our existing Mobile Mini footprint to expand our downstream specialty containment market in 2016. Throughout the second half of 2015, we have gained traction and are well-positioned to leverage our investments for mid to high single-digit rental revenue growth in 2016.”

Conference Call

Mobile Mini will host a conference call today, Friday, February 5, 2016 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 Investors 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 205,200 portable storage containers and office units. Through its wholly-owned subsidiary, Evergreen Tank Solutions, Mobile Mini is also a leading provider of specialty containment solutions in the U.S., with a rental fleet of approximately 11,700 units. Mobile Mini’s network includes 133 portable storage locations in the U.S., U.K., and Canada, 19 specialty containment locations and 7 combined locations. 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, our expectations regarding ongoing momentum in certain sectors, including our construction, industrial, and diversified sectors; our ability to leverage our footprint to expand our downstream specialty containment market in 2016; and our ability to leverage our investments for mid to high single-digit rental revenue growth in 2016, 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)

Reclassifications:

Certain amounts in the consolidated statements of operations for the three months ended March 31, 2015, which are included in the year-to-date period ended December 31, 2015, have been reclassified to conform to the current period presentation. The reclassifications have no effect on total revenues, income from operations, net income or net income per common share.

The Company believes the current presentation better reflects the nature of the underlying financial statement items.

     
  Mobile Mini, Inc.  
  Condensed Consolidated Statements of Income  
  (Unaudited)  
  (in thousands, except per share data)  
     
      Three Months Ended December 31, 2015     Three Months Ended December 31, 2014    
      Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)    
                                                     
  Revenues:                                                  
  Rental   $ 126,540     $     $ 126,540     $ 113,443     $     $ 113,443    
  Sales     7,188             7,188       7,824             7,824    
  Other     789       (77 )     712       1,948             1,948    
  Total revenues     134,517       (77 )     134,440       123,215             123,215    
                                                     
  Costs and expenses:                                                  
  Rental, selling and general expenses     78,443       (705 )     77,738       76,554       (4,994 )     71,560    
  Cost of sales     4,772             4,772       5,813             5,813    
  Restructuring expenses     16,025       (16,025 )           633       (633 )        
  Depreciation and amortization     15,269             15,269       11,414             11,414    
  Total costs and expenses     114,509       (16,730 )     97,779       94,414       (5,627 )     88,787    
                                                     
  Income from operations     20,008       16,653       36,661       28,801       5,627       34,428    
                                                     
  Other expense:                                                  
  Interest expense     (8,914 )           (8,914 )     (7,538 )           (7,538 )  
  Deferred financing costs write-off     (931 )     931                            
                                                     
  Income before tax provision     10,163       17,584       27,747       21,263       5,627       26,890    
                                                     
  Income tax provision     658       8,652       9,310       8,400       1,465       9,865    
                                                     
  Net income   $ 9,505     $ 8,932     $ 18,437     $ 12,863     $ 4,162     $ 17,025    
                                                     
  EBITDA   $ 35,277             $ 54,924     $ 40,215             $ 49,035    
  EBITDA as a percentage of total revenues     26.2 %             40.9 %     32.6 %             39.8 %  
                                                     
  Earnings per share:                                                  
  Basic   $ 0.21             $ 0.42     $ 0.28             $ 0.37    
  Diluted     0.21               0.41       0.28               0.37    
                                                     
  Weighted average number of common and

common share equivalents outstanding:

                                                 
  Basic     44,383               44,383       45,724               45,724    
  Diluted     44,762               44,762       46,365               46,365    
                                                     
 

(1) Adjusted column for the three months ended December 31, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted
figures are a non-GAAP presentation. See reconciliations herein, and additional non-GAAP financial information, including additional information regarding these
adjustments, following in this earnings release

.

(2) Adjusted column for the three months ended December 31, 2014 excludes certain transactions that management believes are not indicative of its business as described
below. Adjusted figures are a non-GAAP presentation. See reconciliations herein, and additional information regarding non-GAAP financial information following in this
earnings release. Adjustments in the three months ended December 31, 2014 include:

  • Reduction of $5.0 million to rental, selling and general expenses for acquisition-related expenses, primarily due to the acquisition of Evergreen Tank Solutions
    (“ETS”) in December 2014.
  • Costs of $0.6 million related to the restructuring of our business operations.
 
                                                     

 

       
  Mobile Mini, Inc.    
  Condensed Consolidated Statements of Income    
  (Unaudited, except as indicated)    
  (in thousands, except per share data)    
                                                     
      Year Ended December 31, 2015     Year Ended December 31, 2014    
      Actual     Adjustments     Adjusted (1)     Actual     Adjustments     Adjusted (2)    
                              (audited)                    
  Revenues:                                                  
  Rental   $ 494,715     $     $ 494,715     $ 410,362     $     $ 410,362    
  Sales     29,953             29,953       31,585             31,585    
  Other     6,109       (4,173 )     1,936       3,527             3,527    
  Total revenues     530,777       (4,173 )     526,604       445,474             445,474    
                                                     
  Costs and expenses:                                                  
  Rental, selling and general expenses     326,252       (7,879 )     318,373       280,948       (5,070 )     275,878    
  Cost of sales     19,671             19,671       21,944             21,944    
  Restructuring expenses     20,798       (20,798 )           3,542       (3,542 )        
  Asset impairment charge and loss on

divestiture, net

    66,128       (66,128 )           557       (557 )        
  Depreciation and amortization     60,344             60,344       39,334             39,334    
  Total costs and expenses     493,193       (94,805 )     398,388       346,325       (9,169 )     337,156    
                                                     
  Income from operations     37,584       90,632       128,216       99,149       9,169       108,318    
                                                     
  Other expense:                                                  
  Interest income     1             1                      
  Interest expense     (35,900 )           (35,900 )     (28,729 )           (28,729 )  
  Deferred financing costs write-off     (931 )     931                            
  Foreign currency exchange     (2 )           (2 )     (1 )           (1 )  
                                                     
  Income before tax provision     752       91,563       92,315       70,419       9,169       79,588    
                                                     
  Income tax (benefit) provision     (4,822 )     37,093       32,271       26,033       2,505       28,538    
                                                     
  Net income   $ 5,574     $ 54,470     $ 60,044     $ 44,386     $ 6,664     $ 51,050    
                                                     
  EBITDA   $ 97,927             $ 200,836     $ 138,482             $ 162,141    
  EBITDA as a percentage of total revenues     18.4 %             38.1 %     31.1 %             36.4 %  
                                                     
  Earnings per share:                                                  
  Basic   $ 0.12             $ 1.34     $ 0.96             $ 1.11    
  Diluted     0.12               1.32       0.95               1.09    
                                                     
  Weighted average number of common and

common share equivalents outstanding:

                                                 
  Basic     44,953               44,953       46,026               46,026    
  Diluted     45,460               45,460       46,725               46,725    
                                                     
 

(1) Adjusted column for the year ended December 31, 2015 excludes certain transactions that management believes are not indicative of our business. Adjusted figures are a
non-GAAP presentation. See reconciliations herein, and additional non-GAAP financial information, including additional information regarding these adjustments,
following in this earnings release.

 

(2) Adjusted column for the year ended December 31, 2014 excludes certain transactions that management believes are not indicative of our business as described below.
Adjusted figures are a non-GAAP presentation. See reconciliations herein, and additional information regarding non-GAAP financial information following in this earnings
release. Adjustments in the year ended December 31, 2014 include:

  • Reduction of $5.1 million to rental, selling and general expenses for acquisition-related expenses, primarily due to the acquisition of ETS in December 2014.
  • Costs of $3.5 million related to the restructuring of our business operations.
  • Asset impairment loss related to the completion of sale of certain assets written-down to fair value during the second quarter of 2013.
 
                                                     

 

       
  Mobile Mini, Inc.    
  Operating Data    
  (Unaudited)    
                     
           
      2015     2014    
  As of December 31:                  
  Stand-alone portable storage locations     133       136    
  Stand-alone specialty containment locations     19       24    
  Combined portable storage and specialty product locations     7          
  Portable storage rental fleet units     205,200       213,500    
  Specialty containment rental fleet units     11,700       10,600    
                     
  Average Utilization:                  
  Portable storage - three months ended December 31     74.0 %     72.8 %  
  Portable storage - twelve months ended December 31     69.4 %     68.6 %  
  Specialty containment - three months ended December 31*     64.4 %     70.6 %  
  Specialty containment - twelve months ended December 31*     68.0 %     70.1 %  
                     
                     
  *Specialty containment 2014 includes portions of the periods prior to acquisition.                  
                     
       
  Mobile Mini, Inc.    
  Business Segment Information - Adjusted (1)    
  (Unaudited)    
  (in thousands)    
                                                     
      Three Months Ended December 31, 2015     Three Months Ended December 31, 2014    
      Portable

Storage

    Specialty

Containment

    Total     Portable

Storage

    Specialty

Containment

    Total    
                                                     
  Revenues:                                                  
  Rental   $ 102,196     $ 24,344     $ 126,540     $ 108,020     $ 5,423     $ 113,443    
  Sales     5,495       1,693       7,188       7,661       163       7,824    
  Other     693       19       712       1,102       846       1,948    
  Total revenues     108,384       26,056       134,440       116,783       6,432       123,215    
                                                     
  Costs and expenses:                                                  
  Rental, selling and general expenses     62,505       15,233       77,738       68,206       3,354       71,560    
  Cost of sales     3,604       1,168       4,772       5,707       106       5,813    
  Depreciation and amortization     8,786       6,483       15,269       9,540       1,874       11,414    
  Total costs and expenses     74,895       22,884       97,779       83,453       5,334       88,787    
                                                     
  Income from operations   $ 33,489     $ 3,172     $ 36,661     $ 33,330     $ 1,098     $ 34,428    
                                                     
  Adjusted EBITDA   $ 45,217     $ 9,707     $ 54,924     $ 46,063     $ 2,972     $ 49,035    
  Adjusted EBITDA Margin     41.7 %     37.3 %     40.9 %     39.4 %     46.2 %     39.8 %  
                                                     
                                                     
                                                     
      Year Ended December 31, 2015     Year Ended December 31, 2014    
      Portable

Storage

    Specialty

Containment

    Total     Portable

Storage

    Specialty

Containment

    Total    
                                                     
  Revenues:                                                  
  Rental   $ 395,091     $ 99,624     $ 494,715     $ 404,939     $ 5,423     $ 410,362    
  Sales     22,387       7,566       29,953       31,422       163       31,585    
  Other     1,864       72       1,936       2,681       846       3,527    
  Total revenues     419,342       107,262       526,604       439,042       6,432       445,474    
                                                     
  Costs and expenses:                                                  
  Rental, selling and general expenses     255,914       62,459       318,373       272,524       3,354       275,878    
  Cost of sales     14,580       5,091       19,671       21,838       106       21,944    
  Depreciation and amortization     34,828       25,516       60,344       37,460       1,874       39,334    
  Total costs and expenses     305,322       93,066       398,388       331,822       5,334       337,156    
                                                     
  Income from operations   $ 114,020     $ 14,196     $ 128,216     $ 107,220     $ 1,098     $ 108,318    
                                                     
  Adjusted EBITDA   $ 160,686     $ 40,150     $ 200,836     $ 159,169     $ 2,972     $ 162,141    
  Adjusted EBITDA Margin     38.3 %     37.4 %     38.1 %     36.3 %     46.2 %     36.4 %  
                                                     
 

(1) These tables present results by major business segment adjusted to exclude certain transactions that management believes are not indicative of our
business. See additional information regarding non-GAAP financial information following in this earnings release.

 
                                                     

 

       
  Mobile Mini, Inc.    
  Condensed Consolidated Balance Sheets    
  (in thousands)    
                     
                     
      December 31,    
      2015     2014    
      (unaudited)     (audited)    
  ASSETS    
  Cash and cash equivalents   $ 1,613     $ 3,739    
  Receivables, net     80,191       81,031    
  Inventories     15,596       16,736    
  Rental fleet, net     951,323       1,087,056    
  Property, plant and equipment, net     131,687       113,175    
  Deposits and prepaid expenses     8,651       8,586    
  Deferred financing costs and other assets     10,562       8,858    
  Intangibles, net     73,212       78,385    
  Goodwill     706,387       705,608    
  Total assets   $ 1,979,222     $ 2,103,174    
                     
  LIABILITIES AND STOCKHOLDERS' EQUITY    
  Liabilities:                  
  Accounts payable   $ 29,086     $ 22,933    
  Accrued liabilities     59,024       63,727    
  Lines of credit, net     667,708       705,518    
  Obligations under capital leases     38,274       24,918    
  Senior Notes, net     200,000       200,000    
  Deferred income taxes     219,601       231,547    
  Total liabilities     1,213,693       1,248,643    
                     
  Stockholders' equity:                  
  Common stock     491       490    
  Additional paid-in capital     584,447       569,083    
  Retained earnings     352,262       380,504    
  Accumulated other comprehensive loss     (44,162 )     (29,870 )  
  Treasury stock     (127,509 )     (65,676 )  
  Total stockholders' equity     765,529       854,531    
  Total liabilities and stockholders' equity   $ 1,979,222     $ 2,103,174    
                     
     
Mobile Mini, Inc.    
Condensed Consolidated Statements of Cash Flows    
(in thousands)    
    Year Ended December 31,    
    2015     2014    
    (unaudited)     (audited)    
Cash Flows from Operating Activities:                  
Net income   $ 5,574     $ 44,386    
Adjustments to reconcile net income to net cash

provided by operating activities:

                 
Deferred financing costs write-off     931          
Asset impairment charge and loss on divestiture, net     66,128       557    
Non-cash restructuring expense     12,411          
Provision for doubtful accounts     3,705       2,777    
Amortization of deferred financing costs     3,131       2,829    
Amortization of long-term liabilities     101       88    
Share-based compensation expense     13,827       15,071    
Depreciation and amortization     60,344       39,334    
Gain on sale of rental fleet     (6,402 )     (5,732 )  
Loss on disposal of property, plant and equipment     2,188       348    
Deferred income taxes     (5,629 )     25,424    
Tax shortfall on equity award transactions     (166 )     (15 )  
Foreign currency transaction loss     2       1    
Changes in certain assets and liabilities, net of

effect of businesses acquired

    (3,331 )     (4,443 )  
Net cash provided by operating activities     152,814       120,625    
                   
Cash Flows from Investing Activities:                  
Proceeds from wood mobile office divestiture, net     83,280          
Cash paid for businesses acquired, net of cash acquired     (18,525 )     (430,946 )  
Additions to rental fleet, excluding acquisitions     (74,732 )     (27,279 )  
Proceeds from sale of rental fleet     16,865       23,053    
Additions to property, plant and equipment, excluding acquisitions     (31,163 )     (15,779 )  
Proceeds from sale of property, plant and equipment     9,860       4,199    
Net cash used in investing activities     (14,415 )     (446,752 )  
                   
Cash Flows from Financing Activities:                  
Net (payments) borrowings under lines of credit     (37,810 )     386,204    
Deferred financing costs     (4,683 )     (719 )  
Principal payments on capital lease obligations     (4,253 )     (1,956 )  
Issuance of common stock     1,703       3,642    
Dividend payments     (33,700 )     (31,384 )  
Purchase of treasury stock     (61,833 )     (26,007 )  
Net cash (used in) provided by financing activities     (140,576 )     329,780    
                   
Effect of exchange rate changes on cash     51       (1,170 )  
                   
Net change in cash     (2,126 )     2,483    
                   
Cash and cash equivalents at beginning of period     3,739       1,256    
Cash and cash equivalents at end of period   $ 1,613     $ 3,739    
                   
Equipment and other acquired through capital lease obligations   $ 17,638     $ 16,508    
Capital expenditures accrued or payable     4,210       819    
                   

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, and free cash flow 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:

       
  Mobile Mini, Inc.    
  Adjusted Income Reconciliations (1)    
  For the Three Months Ended December 31, 2015    
  (Unaudited)    
  (in thousands, except per share data)    
                                                     
   

Statement of
Income

As Reported

  Restructuring

Expense (2)

  Acquisition-

Related

Expense

 

Transition
Services (3)

 

Unclaimed
Property
Settlement (4)

 

Deferred
financing
costs write-
off (5)

 

U.K. Enacted
Tax Rate
Change (6)

 

Statement of
Income

Adjusted

   
                                                     
  Revenues:                                                  
  Rental $ 126,540   $   $   $   $   $   $   $ 126,540    
  Sales   7,188                             7,188    
  Other   789             (77 )               712    
  Total revenues   134,517             (77 )               134,440    
  Costs and expenses:                                                  
  Rental, selling and general

expenses

  78,443         (257 )   (410 )   (38 )           77,738    
  Cost of sales   4,772                             4,772    
  Restructuring expenses   16,025     (16,025 )                          
  Depreciation and amortization   15,269                             15,269    
  Total costs and expenses   114,509     (16,025 )   (257 )   (410 )   (38 )           97,779    
  Income from operations   20,008     16,025     257     333     38                 36,661    
  Other expense:                                                  
  Interest expense   (8,914 )                           (8,914 )  
  Deferred financing costs

write-off

  (931 )                   931            
  Income before income tax provision   10,163     16,025     257     333     38     931         27,747    
  Income tax provision   658     6,166     99     128     15     358     1,886     9,310    
  Net income $ 9,505   $ 9,858   $ 158   $ 205   $ 23   $ 573   $ (1,886 ) $ 18,437    
                                                     
  Diluted shares outstanding   44,762                                         44,762    
                                                     
  Diluted earnings per share $ 0.21                                       $ 0.41    
                                                     
 

(1) Adjustments exclude certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2) Costs relating to the restructuring of our business, primarily the integration and geographic expansion of ETS into the existing Mobile Mini infrastructure.

(3) The $0.1 million of other revenue and $0.4 million of rental, selling and general expenses relate to the provision of short-term transition services,
including housing wood mobile office units on our leased properties.

(4) Expense associated with the settlement of an unclaimed property liability with the state of Delaware.

(5) Write-off of existing deferred financing costs related to our prior ABL Credit Agreement upon entering into our Amended and Restated ABL Credit
Agreement in December 2015.

(6) Adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 
                                                     

 

       
  Mobile Mini, Inc.    
  Adjusted Income Reconciliations (1)    
  For the Year Ended December 31, 2015    
  (Unaudited)    
  (in thousands, except per share data)    
                                                     
   

Statement of
Income
As Reported

  Restructuring

Expense (2)

  Acquisition-

Related

Expense

 

Loss on
Impairment
and
Divestiture
and
Transition
Services (3)

 

Sales Tax
Refund and
Unclaimed
Property
Settlement (4)

 

Deferred
financing
costs write-
off (5)

 

U.K. Enacted
Tax Rate
Change (6)

 

Statement of
Income

Adjusted

   
                                                     
  Revenues:                                                  
  Rental $ 494,715   $   $   $   $   $   $   $ 494,715    
  Sales   29,953                             29,953    
  Other   6,109             (2,997 )   (1,176 )           1,936    
  Total revenues   530,777             (2,997 )   (1,176 )           526,604    
  Costs and expenses:                                                  
  Rental, selling and general

expenses

  326,252         (2,650 )   (4,357 )   (872 )           318,373    
  Cost of sales   19,671                             19,671    
  Restructuring expenses   20,798     (20,798 )                          
  Asset impairment charge and

loss on divestiture, net

  66,128             (66,128 )                  
  Depreciation and amortization   60,344                             60,344    
  Total costs and expenses   493,193     (20,798 )   (2,650 )   (70,485 )   (872 )               398,388    
  Income from operations   37,584     20,798     2,650     67,488     (304 )               128,216    
  Other expense:                                                  
  Interest income   1                             1    
  Interest expense   (35,900 )                           (35,900 )  
  Deferred financing costs

write-off

  (931 )                   931            
  Foreign currency exchange   (2 )                           (2 )  
  Income before income tax provision   752     20,798     2,650     67,488     (304 )   931         92,315    
  Income tax provision   (4,822 )   7,967     1,016     25,983     (117 )   358     1,886     32,271    
  Net income $ 5,574   $ 12,831   $ 1,634   $ 41,505   $ (187 ) $ 573   $ (1,886 ) $ 60,044    
                                                     
  Diluted shares outstanding   45,460                                         45,460    
                                                     
  Diluted earnings per share $ 0.12                                       $ 1.32    
                                                     
 

(1) Adjustments exclude certain transactions that management believes are not indicative of our business. Adjusted figures are a non-GAAP presentation.

(2) Costs relating to the restructuring of our business, primarily the integration and geographic expansion of ETS into the existing Mobile Mini infrastructure.

(3) Asset impairment and loss on divesture represents the impairment and loss associated with the divestiture of our North American wood mobile office
business. The $3.0 million of other revenue and $4.4 million of rental, selling and general expenses relate to the provision of short-term transition
services, including housing wood mobile office units on our leased properties.

(4) Revenue associated with a sales tax refund and expense associated with the settlement of an unclaimed property liability with the state of Delaware.

(5) Write-off of existing deferred financing costs related to our prior ABL Credit Agreement upon entering into our Amended and Restated ABL Credit
Agreement in December 2015.

(6) Adjustments to our existing net deferred income tax liabilities in the U.K. upon the fourth quarter 2015 enactment of a future statutory rate reduction.

 
                                                     

 

       
  Mobile Mini, Inc.    
  Adjusted EBITDA GAAP Reconciliations    
  (Unaudited)    
  (in thousands)    
                                     
      Three Months Ended

December 31,

    Year Ended

December 31,

   
      2015     2014     2015     2014    
  Net income   $ 9,505     $ 12,863     $ 5,574     $ 44,386    
  Interest expense     8,914       7,538       35,900       28,729    
  Income tax provision (benefit)     658       8,400       (4,822 )     26,033    
  Depreciation and amortization     15,269       11,414       60,344       39,334    
  Deferred financing costs write-off     931             931          
  EBITDA     35,277       40,215       97,927       138,482    
                                     
  Share-based compensation expense     2,994       3,193       12,277       14,490    
  Restructuring expenses     16,025       633       20,798       3,542    
  Acquisition-related expenses     257       4,994       2,650       5,070    
  Impairment and divestiture-related revenues

and expenses, net

    333             67,488       557    
  Sales tax refund and unclaimed

property settlement

    38             (304 )        
  Adjusted EBITDA   $ 54,924     $ 49,035     $ 200,836     $ 162,141    
                                     
                                     
      Three Months Ended

December 31,

    Year Ended

December 31,

   
      2015     2014     2015     2014    
  Net cash provided by operating activities   $ 39,093     $ 32,867     $ 152,814     $ 120,625    
  Interest paid     11,950       10,065       32,372       24,559    
  Income and franchise taxes paid     1,661       158       4,935       1,103    
  Share-based compensation expense,

including restructuring expense

    (2,994 )     (3,498 )     (13,827 )     (15,071 )  
  Asset impairment charge and

loss on divestiture, net

                (66,128 )     (557 )  
  Non-cash restructuring expense     (12,411 )           (12,411 )        
  Gain on sale of rental fleet     1,206       1,236       6,402       5,732    
  Loss on disposal of property, plant and equipment     (153 )     (529 )     (2,188 )     (348 )  
  Changes in other assets and liabilities, net of

effect of businesses acquired

    (3,075 )     (84 )     (4,042 )     2,439    
  EBITDA   $ 35,277     $ 40,215     $ 97,927     $ 138,482    
                                     
       
  Mobile Mini, Inc.    
  Free Cash Flow GAAP Reconciliation    
  (Unaudited)    
  (in thousands)    
                                     
      Three Months Ended

December 31,

    Twelve Months Ended

December 31,

   
      2015     2014     2015     2014    
  Net cash provided by operating activities   $ 39,093     $ 32,867     $ 152,814     $ 120,625    
                                     
  Additions to rental fleet, excluding acquisitions     (21,192 )     (10,969 )     (74,732 )     (27,279 )  
  Proceeds from sale of rental fleet     3,565       5,240       16,865       23,053    
  Additions to property, plant and equipment,                                  
  excluding acquisitions     (13,245 )     (4,102 )     (31,163 )     (15,779 )  
  Proceeds from sale of property, plant and equipment     7,413       825       9,860       4,199    
  Net capital expenditures, excluding acquisitions     (23,459 )     (9,006 )     (79,170 )     (15,806 )  
                                     
  Free cash flow   $ 15,634     $ 23,861     $ 73,644     $ 104,819    
                                     

Adjusted net income information 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 that they provide 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 divided by total revenues expressed as a percentage. The GAAP financial measure that is most directly comparable to EBITDA margin is operating margin, which represents operating income divided by revenues.

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.

Source: Mobile Mini, Inc.

For Mobile Mini, Inc.:
Mark Funk, 602-308-3879
Executive VP & Chief Financial Officer
www.mobilemini.com
or
Investor Relations Counsel:
The Equity Group Inc.
Fred Buonocore, 212-836-9607
or
Linda Latman, 212-836-9609