Press Release Details

Mobile Mini Reports Q1 2019 Results and Announces Quarterly Dividend

April 22, 2019 at 4:05 PM EDT
PDF Version

PHOENIX--(BUSINESS WIRE)--Apr. 22, 2019-- 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 March 31, 2019.

Total revenues were $149.7 million and rental revenues were $142.2 million, as compared to $140.7 million and $132.3 million, respectively, for the same period last year. Rental revenues for the Storage Solutions and Tank & Pump Solutions businesses for the current quarter were $112.7 million and $29.4 million, respectively, compared to $106.9 million and $25.5 million, respectively, for the same period last year.

The Company realized net income of $18.1 million, or $0.40 per diluted share, in the first quarter of 2019. On an adjusted basis, first quarter net income was $18.2 million, or $0.41 per diluted share, as compared to adjusted net income of $14.9 million, or $0.33 per diluted share, for the first quarter of 2018. Adjusted EBITDA was $56.2 million and adjusted EBITDA margin was 37.6% for the first quarter of 2019.

Dividend

The Company’s Board of Directors declared a cash dividend of 27.5 cents per share, which will be paid on May 29, 2019 to shareholders of record as of May 15, 2019.

First Quarter 2019 Highlights

  • Continued strong rental revenue growth in Tank & Pump Solutions (“T&P”) with a 15.6% year-over-year increase.
  • Delivered healthy North American Storage Solutions (“SS”) rental revenue year-over-year growth of 8.0%.
  • Delivered year-over-year rate growth of 3.3% in SS and a mid-single digit increase for T&P, for new units placed on rent.
  • Achieved strong average OEC utilization rates of 77.1% for SS and 74.1% for T&P in the first quarter, while investing in fleet for anticipated near-term growth.
  • Achieved adjusted EBITDA growth of 15.8%, compared to the prior-year quarter, with 16.6% in constant currency, and expanded adjusted EBITDA margin by 310 basis points to 37.6%.
  • Generated robust net cash flow from operating activities of $38.8 million and free cash flow of $16.2 million.
  • Enhanced liquidity position through a $1.0 billion refinancing of our ABL Credit Agreement, extending the maturity to March 2024.
  • Increased return on capital employed to 9.0% as of March 31, 2019, which exceeds weighted average cost of capital and is a 170 basis point improvement from March 31, 2018.
  • Decreased leverage ratio to 4.0x at March 31, 2019 from 4.2x at December 31, 2018 and 5.0x at December 31, 2017.

CEO Comments

Erik Olsson, Mobile Mini’s Chief Executive Officer, remarked, “I am very pleased with our performance and profitability in the first quarter, including our 15.8% increase in adjusted EBITDA. Our Tank & Pump division is starting to show its real potential and delivered 35.3% growth in adjusted EBITDA with an adjusted EBITDA margin of 34.9%, which was a 520 basis point increase over last year. Our North America Storage Solutions business is also very healthy, with year-over-year rate increases of 3.2% on our core business coupled with a 2% increase in units on rent. In the United Kingdom, where Brexit continues to cause uncertainty in the general economy, we managed to increase rates and grow trucking and ancillary revenues to offset a small decrease in units on rent, resulting in increased rental revenues in local currency.”

Mr. Olsson continued, “Our outlook remains very positive for the remainder of 2019. In our Tank & Pump business, we have demonstrated to our customers that we provide outstanding service and product, along with technology tools that deliver improved customer efficiency. We believe we are positioned to capitalize on the growth in demand throughout this industry and gain additional business with existing and new customers. Pending orders in the North American Storage Solutions segment remain well above the prior-year at this time and the pipeline remains solid. Overall, North American economic indicators are positive and, for 2019 rental revenue growth we expect to exceed our Evergreen target, while delivering margin expansion, strong free cash flow and meaningful de-leveraging.”

Conference Call

Mobile Mini will host a conference call tomorrow, April 23rd at 11:00 am 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 196,400 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 12,800 units. Mobile Mini’s network is comprised of 156 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, our ability to generate continued margin expansion and growth of revenue, adjusted EBITDA, and free cash flow, as well as our ability to gain additional business from customers and exceed our Evergreen target metrics, 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)

   
Mobile Mini, Inc.  
Condensed Consolidated Statements of Income  
(Unaudited)  
(in thousands, except percentages and per share data)  
                                                               
        Three Months Ended March 31, 2019       Three Months Ended March 31, 2018  
        Actual       Adjustments       Adjusted (1)       Actual       Adjustments       Adjusted (1)  
                                                               
Revenues:                                                              
Rental       $ 142,172       $ —       $ 142,172       $ 132,338       $ —       $ 132,338  
Sales         7,223         —         7,223         8,103         —         8,103  
Other         266         —         266         213         —         213  
Total revenues         149,661         —         149,661         140,654         —         140,654  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         92,234         —         92,234         88,998         —         88,998  
Cost of sales         4,602         —         4,602         5,391         —         5,391  
Restructuring expenses         —         —         —         111         (111 )       —  
Depreciation and amortization         17,335         —         17,335         16,823         —         16,823  
Total costs and expenses         114,171         —         114,171         111,323         (111 )       111,212  
                                                               
Income from operations         35,490         —         35,490         29,331         111         29,442  
                                                               
Other income (expense):                                                              
Interest income         —         —         —         6         —         6  
Interest expense         (10,760 )       —         (10,760 )       (9,599 )       —         (9,599 )
Deferred financing costs write-off         (123 )       123         —         —         —         —  
Foreign currency exchange         1         —         1         66         —         66  
                                                               
Income before income tax provision         24,608         123         24,731         19,804         111         19,915  
                                                               
Income tax provision         6,523         32         6,555         4,949         28         4,977  
                                                               
Net income       $ 18,085       $ 91       $ 18,176       $ 14,855       $ 83       $ 14,938  
                                                               
EBITDA/Adjusted EBITDA       $ 52,826                 $ 56,230       $ 46,226                 $ 48,566  
EBITDA/Adjusted EBITDA as a percentage of

total revenues

         35.3 %                 37.6 %       32.9 %                 34.5 %
                                                               
Earnings per share:                                                              
Basic       $ 0.41                 $ 0.41       $ 0.34                 $ 0.34  
Diluted         0.40                   0.41         0.33                   0.33  
                                                               
Weighted average number of common and

common share equivalents outstanding:

                                                              
Basic         44,448                   44,448         44,214                   44,214  
Diluted         44,877                   44,877         44,842                   44,842  

(1) Adjusted columns for the three months ended March 31, 2019 and 2018 exclude certain transactions that management believes are not indicative of our business.
Adjusted figures are a non-GAAP presentation. See the non-GAAP reconciliations herein and the additional information regarding non-GAAP financial information
following in this earnings release.
   
Mobile Mini, Inc.  
Operating Data  
(Unaudited)  
                       
           
        2019       2018  
As of March 31:                      
Stand-alone Storage Solutions locations         119         119  
Stand-alone Tank & Pump Solutions locations         20         17  
Combined Storage Solutions and Tank & Pump Solutions locations         17         17  
Storage Solutions rental fleet units         196,400         214,900  
Tank & Pump Solutions rental fleet units         12,800         12,300  
                       
Average utilization based on original equipment cost                      
Three months ended March 31:                      
Storage Solutions         77.1 %       68.6 %
Tank & Pump Solutions         74.1 %       73.6 %
                       
   
Mobile Mini, Inc.  
Business Segment Information - Adjusted (1)  
(Unaudited)  
(in thousands, except percentages)  
                                                               
        Three Months Ended March 31, 2019       Three Months Ended March 31, 2018  
       

Storage
Solutions

      

Tank & Pump
Solutions

       Total      

Storage
Solutions

      

Tank & Pump
Solutions

       Total  
                                                               
Revenues:                                                              
Rental       $ 112,725       $ 29,447       $ 142,172       $ 106,864       $ 25,474       $ 132,338  
Sales         5,777         1,446         7,223         6,739         1,364         8,103  
Other         225         41         266         169         44         213  
Total revenues         118,727         30,934         149,661         113,772         26,882         140,654  
                                                               
Costs and expenses:                                                              
Rental, selling and general expenses         72,626         19,608         92,234         70,824         18,174         88,998  
Cost of sales         3,816         786         4,602         4,569         822         5,391  
Depreciation and amortization         10,723         6,612         17,335         10,732         6,091         16,823  
Total costs and expenses         87,165         27,006         114,171         86,125         25,087         111,212  
                                                               
Income from operations       $ 31,562       $ 3,928       $ 35,490       $ 27,647       $ 1,795       $ 29,442  
                                                               
Adjusted EBITDA       $ 45,428       $ 10,802       $ 56,230       $ 40,581       $ 7,985       $ 48,566  
Adjusted EBITDA Margin         38.3 %       34.9 %       37.6 %       35.7 %       29.7 %       34.5 %

(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)  
                       
                       
        March 31,       December 31,  
        2019       2018  
        (unaudited)       (audited)  
ASSETS  
Cash and cash equivalents       $ 4,296       $ 5,605  
Receivables, net         113,201         130,233  
Inventories         11,702         11,725  
Rental fleet, net         943,937         929,090  
Property, plant and equipment, net         150,649         154,254  
Operating lease assets         90,084         —  
Other assets         15,945         13,398  
Intangibles, net         53,967         55,542  
Goodwill         706,639         705,217  
Total assets       $ 2,090,420       $ 2,005,064  
                       
LIABILITIES AND STOCKHOLDERS' EQUITY  
Liabilities:                      
Accounts payable       $ 28,746       $ 33,177  
Accrued liabilities         66,245         88,136  
Operating lease liabilities         91,863         —  
Lines of credit         593,700         593,495  
Obligations under finance leases         62,380         63,359  
Senior notes, net         246,648         246,489  
Deferred income taxes         175,681         170,139  
Total liabilities         1,265,263         1,194,795  
                       
Stockholders' equity:                      
Common stock         503         500  
Additional paid-in capital         624,941         619,850  
Retained earnings         416,387         410,641  
Accumulated other comprehensive loss         (67,756 )       (72,861 )
Treasury stock         (148,918 )       (147,861 )
Total stockholders' equity         825,157         810,269  
Total liabilities and stockholders' equity       $ 2,090,420       $ 2,005,064  
                       
   
Mobile Mini, Inc.  
Condensed Consolidated Statements of Cash Flows  
(Unaudited)  
(in thousands)  
        Three Months Ended  
        March 31,  
        2019       2018  
Cash flows from operating activities:                      
Net income       $ 18,085       $ 14,855  
Adjustments to reconcile net income to net cash

provided by operating activities:

                      
Deferred financing costs write-off         123         —  
Provision for doubtful accounts         1,212         961  
Amortization of deferred financing costs         505         515  
Amortization of long-term liabilities         13         36  
Share-based compensation expense         3,404         2,229  
Depreciation and amortization         17,335         16,823  
Gain on sale of rental fleet         (1,425 )       (1,533 )
Loss on disposal of property, plant and equipment         18         334  
Deferred income taxes         5,058         4,397  
Foreign currency exchange         (1 )       (66 )
Changes in certain assets and liabilities, net of

effect of businesses acquired

         (5,544 )       (3,620 )
Net cash provided by operating activities         38,783         34,931  
                       
Cash flows from investing activities:                      
Additions to rental fleet, excluding acquisitions         (23,016 )       (15,389 )
Proceeds from sale of rental fleet         3,338         3,844  
Additions to property, plant and equipment, excluding acquisitions         (2,919 )       (4,752 )
Proceeds from sale of property, plant and equipment         49         179  
Net cash used in investing activities         (22,548 )       (16,118 )
                       
Cash flows from financing activities:                      
Net borrowings (repayments) under lines of credit         203         (12,443 )
Deferred financing costs         (3,254 )       —  
Principal payments on finance lease obligations         (2,586 )       (1,990 )
Issuance of common stock         1,690         1,525  
Dividend payments         (12,426 )       (11,054 )
Purchase of treasury stock         (1,057 )       (533 )
Net cash used in financing activities         (17,430 )       (24,495 )
                       
Effect of exchange rate changes on cash         (114 )       (6 )
                       
Net change in cash         (1,309 )       (5,688 )
                       
Cash and cash equivalents at beginning of period         5,605         13,451  
Cash and cash equivalents at end of period       $ 4,296       $ 7,763  
                       
Equipment and other acquired through finance lease obligations       $ 1,609       $ 2,897  
Capital expenditures accrued or payable         8,012         6,613  
                       

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 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:

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

March 31,

  
        2019       2018  
Net income       $ 18,085       $ 14,855  
Interest expense         10,760         9,599  
Income tax provision         6,523         4,949  
Depreciation and amortization         17,335         16,823  
Deferred financing costs write-off         123         —  
EBITDA         52,826         46,226  
                       
Share-based compensation expense         3,404         2,229  
Restructuring expenses         —         111  
Adjusted EBITDA       $ 56,230       $ 48,566  
                       
                       
        Three Months Ended

March 31,

  
        2019       2018  
Net cash provided by operating activities       $ 38,783       $ 34,931  
Interest paid         14,276         12,348  
Income and franchise taxes paid         2,020         120  
Share-based compensation expense,

including restructuring expense

         (3,404 )       (2,229 )
Gain on sale of rental fleet         1,425         1,533  
Loss on disposal of property, plant and

equipment

         (18 )       (334 )
Changes in certain assets and liabilities, net of

effect of businesses acquired

         (256 )       (143 )
EBITDA       $ 52,826       $ 46,226  
                       
   
Mobile Mini, Inc.  
Free Cash Flow GAAP Reconciliation  
(Unaudited)  
(in thousands)  
                       
        Three Months Ended

March 31,

  
        2019       2018  
Net cash provided by operating activities       $ 38,783       $ 34,931  
                       
Additions to rental fleet, excluding acquisitions         (23,016 )       (15,389 )
Proceeds from sale of rental fleet         3,338         3,844  
Additions to property, plant and equipment,

excluding acquisitions

         (2,919 )       (4,752 )
Proceeds from sale of property, plant and

equipment

         49         179  
Net capital expenditures, excluding acquisitions         (22,548 )       (16,118 )
                       
Free cash flow       $ 16,235       $ 18,813  
                       

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 March 31, 2019 were $1.3 million and $0.4 million higher than when calculated in accordance with GAAP.

 

Source: Mobile Mini, Inc.

Van Welch, Executive VP &
Chief Financial Officer
Mobile Mini, Inc.
(602) 308-3879
www.mobilemini.com

-OR-

INVESTOR RELATIONS COUNSEL:
The Equity Group Inc.
Fred Buonocore (212) 836-9607
Kevin Towle (212) 836-9620