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wsc-20230630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2023
OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________


Commission File Number:			001-37552

WILLSCOT MOBILE MINI HOLDINGS CORP.

(Exact name of registrant as specified in its charter)


Delaware						82-3430194
(State or other jurisdiction of incorporation)						(I.R.S. Employer Identification No.)

4646 E Van Buren St., Suite 400

Phoenix, Arizona 85008

(Address, including zip code, of principal executive offices)

(480) 894-6311

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	WSC	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒			Accelerated filer ☐
Non-accelerated filer ☐			Smaller reporting company ☐
			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

Shares of Common Stock, par value $0.0001 per share, outstanding: 197,304,704 shares at July 28, 2023.

WILLSCOT MOBILE MINI HOLDINGS CORP.

Quarterly Report on Form 10-Q

Table of Contents


PART I Financial Information
	Item 1	Financial Statements (unaudited, except as noted below)
			Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022 (audited)
			Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022
			Condensed Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2023 and 2022
			Condensed Consolidated Statements of Changes in Equity for the Three and Six Months Ended June 30, 2023 and 2022
			Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022
			Notes to the Condensed Consolidated Financial Statements
	Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3	Quantitative and Qualitative Disclosures About Market Risk
	Item 4	Controls and Procedures
PART II Other Information
	Item 1	Legal Proceedings
	Item 1A	Risk Factors
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3	Defaults Upon Senior Securities
	Item 4	Mine Safety Disclosures
	Item 5	Other Information
	Item 6	Exhibits
SIGNATURE

ITEM 1. Financial Statements

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Balance Sheets


(in thousands, except share data)	June 30, 2023 (unaudited)		December 31, 2022

Assets
Cash and cash equivalents	$	7,660	$	7,390
Trade receivables, net of allowances for credit losses at June 30, 2023 and December 31, 2022 of $68,096 and $57,048, respectively	441,643		409,766
Inventories	44,360		41,030
Prepaid expenses and other current assets	42,868		31,635
Assets held for sale - current	8,924		31,220
Total current assets	545,455		521,041
Rental equipment, net	3,196,518		3,077,287
Property, plant and equipment, net	315,444		304,659
Operating lease assets	234,468		219,405
Goodwill	1,012,135		1,011,429
Intangible assets, net	407,250		419,125
Other non-current assets	7,230		6,683
Assets held for sale - non-current	—		268,022
Total long-term assets	5,173,045		5,306,610
Total assets	$	5,718,500	$	5,827,651
Liabilities and equity
Accounts payable	$	91,783	$	109,349
Accrued expenses	120,301		109,542
Accrued employee benefits	43,647		56,340
Deferred revenue and customer deposits	209,726		203,793
Operating lease liabilities - current	54,110		50,499
Current portion of long-term debt	13,952		13,324
Liabilities held for sale - current	—		19,095
Total current liabilities	533,519		561,942
Long-term debt	3,035,521		3,063,042
Deferred tax liabilities	506,425		401,453
Operating lease liabilities - non-current	181,319		169,618

Other non-current liabilities	23,171		18,537
Liabilities held for sale - non-current	—		47,759
Long-term liabilities	3,746,436		3,700,409
Total liabilities	4,279,955		4,262,351

Preferred Stock: $0.0001 par, 1,000,000 shares authorized and zero shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common Stock: $0.0001 par, 500,000,000 shares authorized and 198,375,893 and 207,951,682 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	20		21
Additional paid-in-capital	2,435,571		2,886,951
Accumulated other comprehensive loss	(44,109)		(70,122)
Accumulated deficit	(952,937)		(1,251,550)
Total shareholders' equity	1,438,545		1,565,300
Total liabilities and shareholders' equity	$	5,718,500	$	5,827,651

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Statements of Operations

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands, except share and per share data)	2023		2022		2023		2022
Revenues:
Leasing and services revenue:
Leasing	$	449,320	$	386,386	$	889,271	$	737,945
Delivery and installation	112,754		110,841		219,384		196,380
Sales revenue:
New units	9,004		9,927		19,661		15,714
Rental units	11,011		15,736		19,241		24,022
Total revenues	582,089		522,890		1,147,557		974,061
Costs:
Costs of leasing and services:
Leasing	98,556		88,111		196,071		168,445
Delivery and installation	81,349		82,537		156,356		153,117
Costs of sales:
New units	4,795		5,321		11,003		9,077
Rental units	5,067		8,478		9,521		13,370
Depreciation of rental equipment	64,450		63,230		123,606		120,778
Gross profit	327,872		275,213		651,000		509,274
Expenses:
Selling, general and administrative	146,810		150,129		297,702		288,273

Other depreciation and amortization	17,346		14,951		34,519		30,313


Currency losses (gains), net	14		(173)		6,789		(36)
Other income, net	(2,838)		(3,794)		(6,197)		(5,077)
Operating income	166,540		114,100		318,187		195,801
Interest expense	47,246		33,153		92,112		63,723
Income from continuing operations before income tax	119,294		80,947		226,075		132,078
Income tax expense from continuing operations	31,565		20,848		62,075		32,931
Income from continuing operations	87,729		60,099		164,000		99,147

Discontinued operations:
Income from discontinued operations before income tax	—		17,140		4,003		32,927
Gain on sale of discontinued operations	—		—		176,078		—
Income tax expense from discontinued operations	—		3,863		45,468		7,527
Income from discontinued operations	—		13,277		134,613		25,400

Net income	$	87,729	$	73,376	$	298,613	$	124,547

Earnings per share from continuing operations attributable to WillScot Mobile Mini common shareholders:
Basic	$	0.44	$	0.27	$	0.80	$	0.45
Diluted	$	0.43	$	0.26	$	0.78	$	0.44
Earnings per share from discontinued operations attributable to WillScot Mobile Mini common shareholders:
Basic	$	—	$	0.06	$	0.66	$	0.11
Diluted	$	—	$	0.06	$	0.65	$	0.11
Earnings per share attributable to WillScot Mobile Mini common shareholders:
Basic	$	0.44	$	0.33	$	1.46	$	0.56
Diluted	$	0.43	$	0.32	$	1.43	$	0.55
Weighted average shares:
Basic	200,946,619		223,376,276		204,635,764		222,196,986
Diluted	204,326,162		227,484,012		208,233,141		226,983,150

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Net income	$	87,729	$	73,376	$	298,613	$	124,547
Other comprehensive income (loss):
Foreign currency translation adjustment, net of income tax expense of $0 for both the three and six months ended June 30, 2023 and 2022	5,915		(25,628)		13,849		(29,702)
Net gain on derivatives, net of income tax expense of $4,268 and $394 for the three months ended June 30, 2023 and 2022, respectively, and $4,046 and $1,171 for the six months ended June 30, 2023 and 2022, respectively.	12,831		1,176		12,164		3,497
Total other comprehensive income (loss)	18,746		(24,452)		26,013		(26,205)
Total comprehensive income	$	106,475	$	48,924	$	324,626	$	98,342

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Statements of Changes in Equity

(Unaudited)


Six Months Ended June 30, 2023
	Common Stock			Additional Paid-in-Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
(in thousands)	Shares	Amount
Balance at December 31, 2022	207,952	$	21	$	2,886,951	$	(70,122)	$	(1,251,550)	$	1,565,300
Net income	—	—		—		—		210,884		210,884
Other comprehensive income	—	—		—		7,267		—		7,267
Withholding taxes on net share settlement of stock-based compensation	—	—		(10,058)		—		—		(10,058)
Stock-based compensation and issuance of Common Stock from vesting	355	—		8,150		—		—		8,150
Repurchase and cancellation of Common Stock	(4,589)	—		(217,687)		—		—		(217,687)
Issuance of Common Stock from the exercise of options	6	—		68		—		—		68
Balance at March 31, 2023	203,723	21		2,667,424		(62,855)		(1,040,666)		1,563,924
Net income	—	—		—		—		87,729		87,729
Other comprehensive income	—	—		—		18,746		—		18,746

Stock-based compensation and issuance of Common Stock from vesting	35	—		9,348		—		—		9,348
Repurchase and cancellation of Common Stock	(5,406)	(1)		(241,545)		—		—		(241,546)
Issuance of Common Stock from the exercise of options	24	—		344		—		—		344
Balance at June 30, 2023	198,376	$	20	$	2,435,571	$	(44,109)	$	(952,937)	$	1,438,545


Six Months Ended June 30, 2022
	Common Stock			Additional Paid-in-Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Total Shareholders' Equity
(in thousands)	Shares	Amount
Balance at December 31, 2021	223,940	$	22	$	3,616,902	$	(29,071)	$	(1,591,090)	$	1,996,763
Net income	—	—		—		—		51,171		51,171
Other comprehensive loss	—	—		—		(1,753)		—		(1,753)
Withholding taxes on net share settlement of stock-based compensation	—	—		(12,295)		—		—		(12,295)
Stock-based compensation and issuance of Common Stock from vesting	498	—		6,395		—		—		6,395
Repurchase and cancellation of Common Stock and warrants	(2,064)	—		(77,409)		—		—		(77,409)
Issuance of Common Stock from the exercise of options and warrants	800	—		3,313		—		—		3,313
Balance at March 31, 2022	223,174	22		3,536,906		(30,824)		(1,539,919)		1,966,185
Net income	—	—		—		—		73,376		73,376
Other comprehensive loss	—	—		—		(24,452)		—		(24,452)
Withholding taxes on net share settlement of stock-based compensation	—	—		(1,075)		—		—		(1,075)
Stock-based compensation and issuance of Common Stock from vesting	70	—		9,292		—		—		9,292
Repurchase and cancellation of Common Stock and warrants	(7,222)	—		(249,515)		—		—		(249,515)
Issuance of Common Stock from the exercise of options and warrants	69	—		139		—		—		139
Balance at June 30, 2022	216,091	$	22	$	3,295,747	$	(55,276)	$	(1,466,543)	$	1,773,950

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

WillScot Mobile Mini Holdings Corp.

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six Months Ended June 30,
(in thousands)	2023		2022
Operating activities:
Net income	$	298,613	$	124,547
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	158,125		168,050
Provision for credit losses	22,193		18,865
Gain on sale of discontinued operations	(176,078)		—

Gain on sale of rental equipment and other property, plant and equipment	(11,691)		(14,195)
Amortization of debt discounts and debt issuance costs	5,501		6,975


Stock-based compensation expense	17,498		15,687
Deferred income tax expense	90,675		31,072
Loss on foreign currency forward contract	7,715		—
Unrealized currency losses, net	(1,030)		(71)
Other	2,176		1,916
Changes in operating assets and liabilities:
Trade receivables	(48,641)		(60,737)
Inventories	(2,273)		(9,293)
Prepaid expenses and other assets	(2,211)		(13,907)
Operating lease assets and liabilities	37		936

Accounts payable and other accrued expenses	(19,705)		34,756
Deferred revenue and customer deposits	10,016		29,252
Net cash provided by operating activities	350,920		333,853
Investing activities:
Proceeds from sale of discontinued operations	403,992		—
Acquisitions, net of cash acquired	(149,421)		(103,927)
Proceeds from sale of rental equipment	25,254		35,080
Purchase of rental equipment and refurbishments	(102,709)		(225,389)
Payment for settlement of foreign currency forward contract	(7,715)		—
Proceeds from the sale of property, plant and equipment	265		751
Purchase of property, plant and equipment	(11,189)		(20,253)
Net cash provided by (used in) investing activities	158,477		(313,738)
Financing activities:
Receipts from issuance of Common Stock from the exercise of options	412		3,452
Repurchase and cancellation of Common Stock and warrants	(456,297)		(319,225)

Receipts from borrowings	628,538		454,322
Payment of financing costs	—		(8,021)
Repayment of borrowings	(674,719)		(127,607)

Principal payments on finance lease obligations	(8,133)		(10,353)
Taxes paid on employee stock awards	(10,058)		(13,370)

Net cash used in financing activities	(520,257)		(20,802)
Effect of exchange rate changes on cash and cash equivalents	746		(306)
Net change in cash and cash equivalents	(10,114)		(993)
Cash and cash equivalents at the beginning of the period	17,774		12,699
Cash and cash equivalents at the end of the period	$	7,660	$	11,706

Supplemental cash flow information:
Interest paid, net	$	86,123	$	59,980
Income taxes paid, net	$	15,055	$	10,608
Assets acquired under capital leases	$	24,379	$	17,065
Capital expenditures accrued or payable	$	18,740	$	39,949

See the accompanying notes which are an integral part of these condensed consolidated financial statements.

WillScot Mobile Mini Holdings Corp.

Notes to the Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 - Summary of Significant Accounting Policies

Organization and Nature of Operations

WillScot Mobile Mini Holdings Corp. (“WillScot Mobile Mini” and, together with its subsidiaries, the “Company”) is a leading business services provider specializing in innovative flexible work space and portable storage solutions in the United States (“US”), Canada, and Mexico. The Company leases, sells, delivers and installs modular space solutions and portable storage products through an integrated network of branch locations that spans North America.

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and notes required by US Generally Accepted Accounting Principles ("GAAP") for complete financial statements. The accompanying unaudited condensed consolidated financial statements comprise the financial statements of WillScot Mobile Mini and its subsidiaries that it controls due to ownership of a majority voting interest and contain all adjustments, which are of a normal and recurring nature, considered necessary by management to present fairly the financial position, results of operations and cash flows for the interim periods presented.

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the full year. For further information, refer to the consolidated financial statements and notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022.

Reclassifications

Certain reclassifications have been made to prior year financial statements to conform to the current year presentation.

Recently Issued and Adopted Accounting Standards

In October 2021, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers ("ASU 2021-08"). ASU 2021-08 requires that an acquirer recognize and measure contract assets and liabilities acquired in a business combination in accordance with FASB Accounting Standards Codification 606, Revenue from Contracts with Customers ("ASC 606"). The Company adopted ASU 2021-08 on January 1, 2023 on a prospective basis. The adoption of this ASU did not have a material impact on the Company's financial statements or related disclosures.

NOTE 2 - Acquisitions

WillScot Mobile Mini is the holding company for the Williams Scotsman and Mobile Mini family of companies, which resulted from the combination of WillScot Corporation (“WillScot”) and Mobile Mini, Inc. (“Mobile Mini”) through a merger that occurred on July 1, 2020 (the "Merger").

Asset Acquisitions

During the six months ended June 30, 2023, the Company acquired certain assets and liabilities of five regional and local storage and modular companies, which consisted primarily of approximately 1,800 storage units and 700 modular units, for $149.4 million in cash, net of cash acquired. The accompanying consolidated financial statements include $147.9 million of rental equipment and $4.5 million of land held for sale as of June 30, 2023 as a result of these acquisitions. A sale of the acquired land is expected to close before the end of the year.

Integration Costs

The Company recorded $2.2 million and $5.2 million in integration costs related to asset acquisitions and the Merger within selling, general and administrative expense ("SG&A") during the three months ended June 30, 2023 and 2022, respectively, and $6.1 million and $9.3 million in integration costs related to acquisitions and the Merger during the six months ended June 30, 2023 and 2022, respectively.

NOTE 3 - Discontinued Operations

Tank and Pump Divestiture

On September 30, 2022, the Company sold its former Tank and Pump segment for $321.9 million. Exiting the former Tank and Pump segment represented the Company’s strategic shift to concentrate its operations on its core modular and storage businesses. The criteria for discontinued operations presentation were met during the third quarter of 2022 and results for the former Tank and Pump segment are reported in income from discontinued operations within the consolidated statements of operations for periods presented prior to September 30, 2022.

UK Storage Solutions Divestiture

On December 12, 2022, the Company entered into a stock purchase agreement to sell its former UK Storage Solutions segment. The sale transaction was completed on January 31, 2023. Total cash consideration for the transaction was $418.1 million. Exiting the former UK Storage Solutions segment represented the Company’s strategic shift to concentrate its operations on its core modular and storage businesses in North America. The criteria for discontinued operations presentation were met during the fourth quarter of 2022 and results for the former UK Storage Solutions segment are reported in income from discontinued operations within the consolidated statements of operations for all periods presented. The carrying value of the former UK Storage Solutions segment's assets and liabilities are presented within assets and liabilities held for sale on the consolidated balance sheet as of December 31, 2022.

The following tables present the results of the former Tank and Pump segment and the former UK Storage Solutions segment as reported in income from discontinued operations within the consolidated statements of operations, and the carrying value of the former UK Storage Solutions segment's assets and liabilities as presented within assets and liabilities held for sale on the consolidated balance sheet.


	Six Months Ended June 30, 2023
(in thousands)	UK Storage Solutions
Revenues:
Leasing and services revenue:
Leasing	$	6,389
Delivery and installation	1,802
Sales revenue:
New units	54
Rental units	449
Total revenues	8,694
Costs:
Costs of leasing and services:
Leasing	1,407
Delivery and installation	1,213
Costs of sales:
New units	38
Rental units	492

Gross profit	5,544
Expenses:
Selling, general and administrative	1,486



Other income, net	(1)
Operating income	4,059
Interest expense	56
Income from discontinued operations before income tax	4,003
Gain on sale of discontinued operations	175,708
Income tax expense from discontinued operations	45,468
Income from discontinued operations	$	134,243
Other selected data:
Adjusted EBITDA from discontinued operations	$	4,124

In January 2023, a $0.4 million adjustment was made to the gain on sale of the former Tank and Pump segment due to the final contractual working capital adjustment. Including this adjustment, the total gain on sale of discontinued operations was $176.1 million for the six months ended June 30, 2023.


	Three Months Ended June 30, 2022
(in thousands)	Tank and Pump		UK Storage Solutions		Total
Revenues:
Leasing and services revenue:
Leasing	$	22,078	$	20,156	$	42,234
Delivery and installation	9,219		5,342		14,561
Sales revenue:
New units	678		489		1,167
Rental units	110		679		789
Total revenues	32,085		26,666		58,751
Costs:
Costs of leasing and services:
Leasing	4,608		4,193		8,801
Delivery and installation	7,640		3,410		11,050
Costs of sales:
New units	496		322		818
Rental units	(23)		500		477
Depreciation of rental equipment	2,793		1,154		3,947
Gross profit	16,571		17,087		33,658
Expenses:
Selling, general and administrative	6,289		5,652		11,941
Other depreciation and amortization	2,413		1,690		4,103

Currency losses, net	—		46		46
Other expense, net	1		5		6
Operating income	7,868		9,694		17,562
Interest expense	190		232		422
Income from discontinued operations before income tax	7,678		9,462		17,140
Income tax expense from discontinued operations	1,997		1,866		3,863
Income from discontinued operations	$	5,681	$	7,596	$	13,277
Other selected data:
Adjusted EBITDA from discontinued operations	$	12,462	$	12,230	$	24,692


	Six Months Ended June 30, 2022
(in thousands)	Tank and Pump		UK Storage Solutions		Total
Revenues:
Leasing and services revenue:
Leasing	$	43,140	$	40,727	$	83,867
Delivery and installation	17,544		11,809		29,353
Sales revenue:					—
New units	1,360		617		1,977
Rental units	324		953		1,277
Total revenues	62,368		54,106		116,474
Costs:
Costs of leasing and services:
Leasing	8,915		8,430		17,345
Delivery and installation	14,651		7,334		21,985
Costs of sales:
New units	1,003		385		1,388
Rental units	72		657		729
Depreciation of rental equipment	6,323		2,292		8,615
Gross profit	31,404		35,008		66,412
Expenses:
Selling, general and administrative	12,501		11,769		24,270
Other depreciation and amortization	4,829		3,515		8,344

Currency losses, net	—		47		47
Other expense (income), net	20		(40)		(20)
Operating income	14,054		19,717		33,771
Interest expense	368		476		844
Income from discontinued operations before income tax	13,686		19,241		32,927
Income tax expense from discontinued operations	3,510		4,017		7,527
Income from discontinued operations	$	10,176	$	15,224	$	25,400
Other selected data:
Adjusted EBITDA from discontinued operations	$	23,968	$	24,774	$	48,742


	December 31, 2022
(in thousands)	UK Storage Solutions
Assets
Cash and cash equivalents	$	10,384
Trade receivables, net of allowances for doubtful accounts of $300	15,991
Inventories	3,058
Prepaid expenses and other current assets	1,787
Rental equipment, net	165,853
Property, plant and equipment, net	20,645
Operating lease assets	15,134
Goodwill	58,144
Intangible assets, net	6,414
Other non-current assets	1,832
Total assets held for sale	$	299,242
Liabilities
Accounts payable	$	4,515
Accrued expenses	3,273
Accrued employee benefits	1,009
Deferred revenue and customer deposits	6,850
Deferred tax liabilities	29,737
Operating lease liabilities	15,192
Other non-current liabilities	6,278
Total liabilities held for sale	$	66,854

For the six months ended June 30, 2022, significant operating and investing items related to the former Tank and Pump segment were as follows:


(in thousands)	Six Months Ended June 30, 2022
Operating activities of discontinued operations:
Depreciation and amortization	$	11,152
Investing activities of discontinued operations:
Proceeds from sale of rental equipment	$	325
Purchases of rental equipment and refurbishments	$	(13,658)

Purchases of property, plant and equipment	$	(170)

The following table presents a reconciliation of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the former Tank and Pump segment for the three and six months ended June 30, 2022. See Note 16 for further information regarding Adjusted EBITDA.


(in thousands)	Three Months Ended June 30, 2022		Six Months Ended June 30, 2022
Income from discontinued operations	$	5,681	$	10,176

Income tax expense from discontinued operations	1,997		3,510
Income from discontinued operations before income tax	7,678		13,686
Interest expense	190		368
Depreciation and amortization	5,206		11,152




Stock compensation expense	135		239
Other	(747)		(1,477)
Adjusted EBITDA from discontinued operations	$	12,462	$	23,968

For the six months ended June 30, 2023 and 2022, significant operating and investing items related to the former UK Storage Solutions segment were as follows:


	Six Months Ended June 30,
(in thousands)	2023		2022
Operating activities of discontinued operations:
Depreciation and amortization	$	—	$	5,807
Investing activities of discontinued operations:
Proceeds from sale of rental equipment	$	514	$	953
Purchases of rental equipment and refurbishments	$	(371)	$	(17,219)
Proceeds from sale of property, plant and equipment	$	8	$	502
Purchases of property, plant and equipment	$	(64)	$	(3,188)

The following table presents reconciliations of Income from discontinued operations before income tax to Adjusted EBITDA from discontinued operations for the former UK Storage Solutions segment for the three and six months ended June 30, 2023 and 2022, respectively. See Note 16 for further information regarding Adjusted EBITDA.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Income from discontinued operations	$	—	$	7,596	$	134,243	$	15,224
Gain on sale of discontinued operations	—		—		175,708		—
Income tax expense from discontinued operations	—		1,866		45,468		4,017
Income from discontinued operations before income tax and gain on sale	—		9,462		4,003		19,241
Interest expense	—		232		56		476
Depreciation and amortization	—		2,844		—		5,807
Currency losses, net	—		46		—		47



Stock compensation expense			29		(196)		47
Other			(383)		261		(844)
Adjusted EBITDA from discontinued operations	$	—	$	12,230	$	4,124	$	24,774

NOTE 4 - Revenue

Revenue Disaggregation

Geographic Areas

The Company had total revenue in the following geographic areas for the three and six months ended June 30, 2023 and 2022 as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
US	$	545,333	$	485,286	$	1,078,507	$	906,970
Canada	30,839		32,901		57,780		58,174
Mexico	5,917		4,703		11,270		8,917
Total revenues	$	582,089	$	522,890	$	1,147,557	$	974,061

Major Product and Service Lines

Equipment leasing is the Company's core business and the primary driver of the Company's revenue and cash flows. This includes modular space and portable storage units along with value-added products and services ("VAPS"), which include furniture, steps, ramps, basic appliances, internet connectivity devices, integral tool racking, heavy duty capacity shelving, workstations, electrical and lighting products and other items used by customers in connection with the Company's products. The Company also offers its lease customers a damage waiver program that protects them in case the leased unit is damaged. Leasing is complemented by new unit sales and sales of rental units. In connection with its leasing and sales activities, the Company provides services including delivery and installation, maintenance and ad hoc services and removal services at the end of lease transactions.

The Company’s revenue by major product and service line for the three and six months ended June 30, 2023 and 2022 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Modular space leasing revenue	$	236,625	$	204,667	$	461,095	$	395,056
Portable storage leasing revenue	93,462		81,186		190,777		151,890
VAPS and third party leasing revenues(a)	97,698		81,855		191,825		157,160
Other leasing-related revenue(b)	21,535		18,678		45,574		33,839
Leasing revenue	449,320		386,386		889,271		737,945
Delivery and installation revenue	112,754		110,841		219,384		196,380
Total leasing and services revenue	562,074		497,227		1,108,655		934,325
New unit sales revenue	9,004		9,927		19,661		15,714
Rental unit sales revenue	11,011		15,736		19,241		24,022
Total revenues	$	582,089	$	522,890	$	1,147,557	$	974,061


(a)			Includes $6.1 million and $5.6 million of service revenue for the three months ended June 30, 2023 and 2022, respectively, and $11.7 million and $11.5 million of service revenue for the six months ended June 30, 2023 and 2022, respectively.
(b)			Includes primarily damage billings, delinquent payment charges, and other processing fees.

Leasing and Services Revenue

The majority of revenue (76% for both the three and six months ended June 30, 2023, and 73% and 75% for the three and six months ended June 30, 2022, respectively) was generated by rental income subject to the guidance of ASU 2018-11, Leases (Topic 842) ("ASC 842"). The remaining revenue was generated by performance obligations in contracts with customers for services or sale of units subject to the guidance in ASC 606.

Receivables and Credit Losses

The Company is exposed to credit losses from trade receivables and manages credit risk at the customer level. Because the same customers generate the revenues that are accounted for under both ASC 606 and ASC 842, the discussions below on credit risk and the Company's allowance for credit losses address the Company's total revenues. Concentration of credit risk with respect to the Company's receivables is limited because of a large number of geographically diverse customers who operate in a variety of end user markets.

The Company assesses each customer’s ability to pay for the products it leases or sells by conducting a credit review that considers expected billing exposure, timing for payment and the customer’s established credit rating. The Company performs its credit review of new customers at inception of the customer relationship and for existing customers when the customer transacts after a defined period of dormancy. The Company also considers contract terms and conditions, country risk and business strategy in the evaluation.

The Company monitors ongoing credit exposure through an active review of customer balances against contract terms and due dates and may employ collection agencies and legal counsel to pursue recovery of defaulted receivables. The allowance for credit losses reflects the estimate of the amount of receivables that the Company will be unable to collect based on historical collection experience and, as applicable, current conditions and reasonable and supportable forecasts that affect collectability. The Company's estimate reflects changing circumstances, including changes in the economy or in the particular circumstances of individual customers. Accordingly, the Company may be required to increase or decrease its allowance.

Activity in the allowance for credit losses was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2023		2022		2023		2022
Balance at beginning of period	$	61,402	$	47,124	$	57,048	$	45,773
Provision for credit losses, net of recoveries	13,390		9,593		22,193		17,904
Write-offs	(6,969)		(5,385)		(11,506)		(12,395)
Foreign currency translation and other	273		(48)		361		2
Balance at end of period	$	68,096	$	51,284	$	68,096	$	51,284

Contract Assets and Liabilities

When customers are billed in advance for services, the Company defers recognition of revenue until the related services are performed, which generally occurs at the end of the contract. The balance sheet classification of deferred revenue

is determined based on the contractual lease term. For contracts that continue beyond their initial contractual lease term, revenue continues to be deferred until the services are performed. During the three months ended June 30, 2023, deferred revenue relating to services billed in advance of $26.2 million was recognized as revenue. As of June 30, 2023 and December 31, 2022, the Company had approximately $104.8 million and $102.2 million, respectively, of deferred revenue related to these services.

The Company does not have material contract assets, and the Company's uncompleted contracts with customers have unsatisfied (or partially satisfied) performance obligations. For the future services revenues that are expected to be recognized within twelve months, the Company has elected to utilize the optional disclosure exemption made available regarding transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations. The transaction price for performance obligations that will be completed in greater than twelve months is variable based on the market rate in place at the time those services are provided, and therefore, the Company is applying the optional expedient to omit disclosure of such amounts.

The primary costs to obtain contracts for new and rental unit sales with the Company's customers are commissions. The Company pays its sales force commissions on the sale of new and rental units. For new and rental unit sales, the period benefited by each commission is less than one year; therefore, the commissions are expensed as incurred.

NOTE 5 - Leases

As of June 30, 2023, the undiscounted future lease payments for operating and finance lease liabilities were as follows:


(in thousands)	Operating		Finance
2023 (remaining)	$	33,230	$	8,905
2024	60,869		17,994
2025	51,326		17,667
2026	39,676		17,351
2027	29,208		14,099
Thereafter	62,057		26,651
Total lease payments	276,366		102,667
Less: interest	(40,937)		(11,939)
Present value of lease liabilities	$	235,429	$	90,728

Finance lease liabilities are included within long-term debt and current portion of long-term debt on the condensed consolidated balance sheets.

The Company’s lease activity during the six months ended June 30, 2023 and 2022 was as follows:


(in thousands)	Six Months Ended June 30,
Financial Statement Line	2023		2022
Finance Lease Expense
Amortization of finance lease assets	$	7,580	$	6,820
Interest on obligations under finance leases	1,566		839
Total finance lease expense	$	9,146	$	7,659

Operating Lease Expense
Fixed lease expense
Cost of leasing and services	$	723	$	1,574
Selling, general and administrative	32,006		29,709

Short-term lease expense
Cost of leasing and services	12,404		16,739
Selling, general and administrative	905		986

Variable lease expense
Cost of leasing and services	1,675		2,822
Selling, general and administrative	4,847		3,419

Total operating lease expense	$	52,560	$	55,249

Supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 was as follows:


(in thousands)	Six Months Ended June 30,
Supplemental Cash Flow Information	2023		2022
Cash paid for the amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	33,501	$	30,918
Operating cash outflows from finance leases	$	1,515	$	837
Financing cash outflows from finance leases	$	8,087	$	7,506

Right of use assets obtained in exchange for lease obligations	$	36,604	$	19,030
Assets obtained in exchange for finance leases	$	24,382	$	14,576

Weighted average remaining operating lease terms and the weighted average discount rates as of June 30, 2023 and December 31, 2022 were as follows:


Lease Terms and Discount Rates	June 30, 2023		December 31, 2022
Weighted average remaining lease term - operating leases	5.6 years		5.8 years
Weighted average discount rate - operating leases	5.6	%	5.0	%
Weighted average remaining lease term - finance leases	5.1 years		4.9 years
Weighted average discount rate - finance leases	4.1	%	3.1	%

The Company presents information related to leasing revenues in Note 4.

NOTE 6 - Inventories

Inventories at the respective balance sheet dates consisted of the following:


(in thousands)	June 30, 2023		December 31, 2022
Raw materials	$	40,971	$	38,611
Finished units	3,389		2,419
Inventories	$	44,360	$	41,030

NOTE 7 - Rental Equipment, net

Rental equipment, net at the respective balance sheet dates consisted of the following:


(in thousands)	June 30, 2023		December 31, 2022
Modular space units	$	3,406,542	$	3,197,779
Portable storage units	851,818		849,193
Value added products	204,665		203,444
Total rental equipment	4,463,025		4,250,416
Less: accumulated depreciation	(1,266,507)		(1,173,129)
Rental equipment, net	$	3,196,518	$	3,077,287

NOTE 8 - Goodwill and Intangibles

Goodwill

Changes in the carrying amount of goodwill were as follows:


(in thousands)	Modular		Storage		Total
Balance at December 31, 2021	$	521,049	$	492,552	$	1,013,601
Effects of movements in foreign exchange rates	(2,172)		—		(2,172)
Balance at December 31, 2022	518,877		492,552		1,011,429
Effects of movements in foreign exchange rates	706		—		706
Balance at June 30, 2023	$	519,583	$	492,552	$	1,012,135

The Company had no goodwill impairment during the six months ended June 30, 2023 or the year ended December 31, 2022.

Intangible Assets

Intangible assets other than goodwill at the respective balance sheet dates consisted of the following:


	June 30, 2023
(in thousands)	Weighted average remaining life (in years)	Gross carrying amount		Accumulated amortization		Net book value
Intangible assets subject to amortization:
Mobile Mini customer relationships	5.0	$	188,000	$	(70,500)	$	117,500
Technology	3.0	1,500		(750)		750
Indefinite-lived intangible assets:
Trade name - Mobile Mini		164,000		—		164,000
Trade name - WillScot		125,000		—		125,000
Total intangible assets other than goodwill		$	478,500	$	(71,250)	$	407,250


	December 31, 2022
(in thousands)	Weighted average remaining life (in years)	Gross carrying amount		Accumulated amortization		Net book value
Intangible assets subject to amortization:
Mobile Mini customer relationships	5.5	$	188,000	$	(58,750)	$	129,250
Technology	3.5	1,500		(625)		875
Indefinite-lived intangible assets:
Trade name - Mobile Mini		164,000		—		164,000
Trade name - WillScot		125,000		—		125,000
Total intangible assets other than goodwill		$	478,500	$	(59,375)

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