WillScot Corporation Provides 2019 Guidance and Reaffirms 2018 Guidance
- 2019 guidance:
- Total revenue between
$1.05and $1.15 billion.
- Adjusted EBITDA1 between
$345and $365 million.
- Net capital expenditures2 (after gross rental unit sales) between
$130and $160 million.
- Total revenue between
Soultz continued, “Supplementing our robust organic leasing fundamentals, we have completed three strategic acquisitions that will more than double our total revenue and Adjusted EBITDA and create an undisputed industry leader. We expect 2019 will be another exciting year, with full-year Adjusted EBITDA growth forecasted to exceed 60% compared to 2018 and an expected Adjusted EBITDA run-rate of approximately
Additional information associated with the 2019 outlook:
- Revenue and Adjusted EBITDA growth forecasts driven by continued strength and diversity of end markets, future revenue visibility resulting from 30 month average lease durations, embedded growth driven by ‘Ready to Work’ solutions, and accelerating synergy realization.
- Forecasted total revenue between
$1.05and $1.15 billion, representing a 45.7% increase over the midpoint of the Company’s 2018 total revenue guidance, reflects organic growth and does not reflect any future acquisition activity.
- Forecasted Adjusted EBITDA between
$345and $365 millionrepresents a 65.1% increase over the midpoint of the Company’s 2018 Adjusted EBITDA guidance, as well as Adjusted EBITDA margin3 expansion of over 350 basis points to 32.3% at the midpoint of the 2019 guidance range.
Capital Expenditures and Liquidity
Boswell commented, “Our capital expenditures are highly discretionary in the short-run, and we reevaluate these investments quarterly based on market conditions. Based on the continued strength in our end markets, we expect net capital expenditures of
The Company anticipates net debt to Adjusted EBITDA of approximately 4x by the end of the second quarter of 2020.
Boswell continued, “Our balance sheet is solid and supports our growth initiatives. Approximately 70% of our debt bears interest at a fixed-rate, we have no debt maturities before 2022, we have ample liquidity under our ABL revolver, and we can evaluate opportunities to reduce our weighted average cost of debt as the business de-levers naturally. As integration costs subside and we realize cost synergies and organic revenue growth, we expect net income and free cash flow to accelerate in the second half of 2019, resulting in steady deleveraging towards our 4x target by the second quarter of 2020. We remain committed to our goal of creating long-term value for all shareholders and are excited about the outlook for 2019.”
ModSpace Integration Update
Soultz noted, “We achieved a critical milestone with the ModSpace integration on
Soultz continued, “As we exit 2019, we expect our annual Adjusted EBITDA run-rate of approximately
Management reaffirmed its 2018 guidance, as updated on
- Total revenue between
$740and $770 million.
- Adjusted EBITDA4 between
$210and $220 million.
- Net rental capital expenditures5 after gross rental unit sales between
$115and $135 million.
Conference Call Information
WillScot will host a conference call and webcast to discuss the 2019 outlook on
The live call can be accessed by dialing (855) 312-9420 (US/
This news release contains forward-looking statements (including the earnings guidance provided herein) within the meaning of the
Non-GAAP Financial Measures
This press release includes non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, net capital expenditures, and net rental capital expenditures. Adjusted EBITDA is defined as net income (loss) before income tax expense, net interest expense, depreciation and amortization adjusted for non-cash items considered non-core to business operations including net currency losses, change in fair value of contingent considerations, goodwill and other impairment charges, restructuring costs and other non-recurring expenses. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by revenue. Net capital expenditures is defined as capital expenditures for purchases and capitalized refurbishments of rental equipment, plus purchases of property, plant and equipment, reduced by proceeds from the sale of rental equipment. Net rental capital expenditures is defined as capital expenditures for purchases and capitalized refurbishments of rental equipment, reduced by proceeds from the sale of rental equipment. WillScot believes that Adjusted EBITDA and Adjusted EBITDA margin are useful to investors because they (i) allow investors to compare performance over various reporting periods on a consistent basis by removing from operating results the impact of items that do not reflect core operating performance; (ii) are used by our board of directors and management to assess our performance; (iii) may, subject to the limitations described below, enable investors to compare the performance of WillScot to its competitors; and (iv) provide additional tools for investors to use in evaluating ongoing operating results and trends. WillScot believes that net capital expenditures and net rental capital expenditures provide useful additional information concerning cash flow available to meet future debt service obligations. However, Adjusted EBITDA is not a measure of financial performance or liquidity under GAAP and, accordingly, should not be considered as an alternative to net income or cash flow from operating activities as an indicator of operating performance or liquidity. These non-GAAP measures should not be considered in isolation from, or as an alternative to, financial measures determined in accordance with GAAP. Other companies may calculate Adjusted EBITDA and other non-GAAP financial measures differently, and therefore WillScot’s non-GAAP financial measures may not be directly comparable to similarly titled measures of other companies. For reconciliation of the non-GAAP measures used in this press release (except as explained below), see “Reconciliation of non-GAAP Financial Measures" included in this press release.
Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to WillScot without unreasonable effort. We cannot provide reconciliations of forward looking Adjusted EBITDA to GAAP financial measures because certain items required for such reconciliations are outside of our control and/or cannot be reasonably predicted, such as the provision for income taxes. Preparation of such reconciliations would require a forward-looking balance sheet, statement of income and statement of cash flow, prepared in accordance with GAAP, and such forward-looking financial statements are unavailable to WillScot without unreasonable effort. Although we provide a range of Adjusted EBITDA that we believe will be achieved, we cannot accurately predict all the components of the Adjusted EBITDA calculation. WillScot provides Adjusted EBITDA guidance because we believe that Adjusted EBITDA, when viewed with our results under GAAP, provides useful information for the reasons noted above.
Additional Information and Where to Find It
Additional information about WillScot can be found on our Investor Relations website at http://investors.willscot.com.
Reconciliation of Non-GAAP Financial Measures
Net Capital Expenditures and Net Rental Capital Expenditures non-GAAP Reconciliation
The following table provides an unaudited reconciliation of purchase of rental equipment to Net capital expenditures and net rental capital expenditures (outlook presented represents the midpoint of the Company’s 2018 and 2019 guidance ranges):
|Outlook for the Twelve Months Ended
|Total purchase of rental equipment and refurbishments from continuing operations||$||(153||)||$
|Total proceeds from sale of rental equipment||28||38|
|Net capital expenditures for rental equipment||(125||)||(135||)|
|Purchase of property, plant and equipment||(7||)||(10||)|
|Net capital expenditures||$||(132||)||$||(145||)|
Adjusted EBITDA Margin
The following table provides an unaudited reconciliation of Adjusted EBITDA Margin (outlook presented represents the midpoint of the Company’s 2018 and 2019 guidance ranges):
|Outlook for the Twelve Months Ended
|(in millions, except %)||2018||2019|
|Adjusted EBITDA (A)||$||215||$
|Adjusted EBITDA Margin (A/B)||28.5||%||$||32.3||%|
1 Adjusted EBITDA is a non-GAAP financial measure. Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort, as discussed below.
2 Net capital expenditures is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.
3 Adjusted EBITDA margin is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release.
4 Adjusted EBITDA is a non-GAAP financial measure. Information reconciling forward-looking Adjusted EBITDA to GAAP financial measures is unavailable to the Company without unreasonable effort, as discussed below.
5 Net rental capital expenditures is a non-GAAP financial measure. Please see the non-GAAP reconciliation tables included at the end of this press release
Source: WillScot Corporation